What is an appropriate cap rate for a portfolio of SFR homes? 60 homes; 2-4 years old; rents $1100 -$1400.

In Selling Property - Asked by Randy J. - Mar 11, 2014
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Answer(s)

Bradley V.
Broker/Agent
Nashua, NH

I posted almost this same question to my CCIM network last week. Got a few responses which seemed to point to a range of 7.5 - 8.5% range.

Mar 12, 2014
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Jack G.
Broker/Agent
San Jose, CA

Another way to approach value on these types of income properties is to look at them each as a single family home. As such, you would value them based on sale comps for each home. If you do this, the values, depending on the area, can be dramatically different from a cap rate value.

Mar 13, 2014
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W.C. W.
Owner/Investor
Quakertown, PA

It really depends on the area. If there will be substantial appreciation, the the cap rate could be
7-7.5%, if not it could be 8-9% cap rate. Remember the cost of funds is 4.5% which should be a consideration when determining cap rates.

Mar 19, 2014
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W.C. W.
Owner/Investor
Quakertown, PA

It really depends on the area. If there will be substantial appreciation, the the cap rate could be
7-7.5%, if not it could be 8-9% cap rate. Remember the cost of funds is 4.5% which should be a consideration when determining cap rates.

Mar 19, 2014
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