07
Nov
Does a capitalization rate apply to single family rentals?
Whereas the capitalization rate is the single most important financial measurement for determining the market value of income property, it doesn’t apply to single family rentals. Sooner or later a single family rental will be occupied by its owner. Consequently, comparable sales, the traditional method used for determining the market value of single family homes, applies. The capitalization rate can be instructive for deciding the size and terms of the mortgage for a single family rental.
