![]() ![]() The cap rate is most valuable when used correctly, i.e. That depends on the type of property you’re talking about. Related: The Ins and Outs of a Multi Family Investment Property What is a Good Cap Rate: High or Low? It’s important to note this difference because answering the question, “What is a good cap rate?” depends on the scale of the building you’re investing in. A property with five or more units is considered a commercial property. So, what is a good cap rate for multi family homes in real estate investing? First, let’s differentiate between the different types of multi family homes and where they fall in the real estate market: commercial real estate or residential real estate?īasically, a multi family home with four or less units is considered a residential property. Related: What’s a Good Cap Rate for Investment Properties? Multi Family Homes for Sale and Cap Rates ![]() Since we’ve established an understanding of what cap rate means in real estate investing, let’s now loop in multi family homes for sale. Since we’re using cost and income to evaluate a property, we should be able to conclude the profitability of that property.
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