The Downside of Cap Rates In Real Estate Valuation (Use This Instead)

The Downside of Cap Rates In Real Estate Valuation (Use This Instead) // Ah, the cap rate. One of the first definitions that many real estate investors learn, the cap rate is one of the most widely used metrics in commercial real estate investing and real estate investment analysis.

But what is the cap rate actually telling you? And do lower cap rates mean automatically mean lower real estate investment returns, and higher cap rates automatically mean higher real estate investment returns? And at the end of the day, do cap rates really even matter?

That’s what we’re going to cover in today’s video.

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