Familiarity With Our Listings
Familiarity With Our Listings
The information in our listings is provided to let buyers see what opportunities exist. Our property listings describe return as Capitalization Rate, Cash On Cash Rate, and Yield.
Use these numbers to evaluate investments, while making sure income comparisons from different sources use the same criteria.
Return rates tell only the story of the past or present, and not the future and may reflect current management’s ability rather than property potential.
Generally, the market pays more (reduces return) for higher quality properties and those with high potential, and it pays less (enhances return) for lower quality or reduced future potential.
Return rates can help evaluate financing structure.
Cash on Cash rate substantially higher than cap rate indicates some combination of low down payment, low interest rate or extended mortgage term.
Usually, the Yield return will be very close to Cash on Cash.
Cash on Cash rates near cap rates indicate shorter term or higher rate mortgages and when accompanied by a fat yield rate indicate investment structure suited to investors interested in rapid wealth (estate) building at the expense of cash flow.