A good cap rate depends upon what the buyer has to invest in the property, whether he is in an acquisition or holding phase and the tenant profile plus vacancy factor in the building. If you can improve the market rents you will raise your NOI and your cap. The lower the cap, generally the more deposit is required. a Good average rule of thumb is to go for 8.5% to 9% though a lower cap rate should not dissuade you from investigating the property further.
Sep 18, 2009