As mentioned in the previous part of the series, your calculator won’t help here.

Cashflow, in turn, will allow to calculate the property’s expected rate of return.

The only reason you care about cap rate is that you’re really trying for an easy proxy for what kind of cash flow the investment is going to generate.

One needs to look at three key figures when considering an investment. Cap rate, is the first of these tools.

Real estate experts the world over ponder as to what are the best metrics implied to do evaluation for the real estate project.

Finance is a branch of economics that deals with the management of money and other assets.

Any residential property, even with all legal safeguards are apparently in place, is ultimately built on land. One cannot automatically assume that this land did not have previous owners.

As real estate asset values continue to fall, banks may be forced into an unfamiliar role, that of active property portfolio management.