Cap Rate and the 2% Rule

According to the 2% rule (for the rent-to-cost ratio), the cap rate of a property (assuming expenses are 50% of gross rent), should be 12%. I think that makes sense. And it makes me understand why the 2% rule is the 2% rule. As in, you should be getting a 12% cap rate. This point is so important, it bears repeating:

Continue reading “Cap Rate and the 2% Rule”