Dear Investor,
Generally an investment property is valued around 7% cap rate. net operating income divided by purchase price gives you the cap rate. You would want to be at least a few % points above that 7% to give you a healthy margin of safety since tenants move in and out. Make sure you know what all the costs are because thats going to impact your cap rate. Good luck and let me know if you have any questions.
Shaw Monfared
916 267 3861
Feb 1, 2010