Current cap rates for apartment buildings
This means that a good cap rate when evaluating multi family homes for sale typically ranges from 4%-10%. If you’re looking at multi family homes for sale in a high demand area, a 4-6% cap rate is reasonable. However, if you’re in a low demand area, you should aim for a cap rate of 10% or above. If you can find apartment buildings like these, purchase them for a good cap rate and then increase that building's cap rate further by improving the property, you will be well on your way to becoming a successful apartment investor. Of course, the difficult thing in most endeavors in life is getting started. 2) market cap rate based on the average cap rates for local investors. In the example, the 8.4% cap rate is the personal cap rate on a $1 million investment. But if the market cap rate is 6.35%, then the full value is indeed $1,344,832.