Tag Archives for " cap rate "

Any time a client is thinking of purchasing a 6-plex in downtown Toronto based on these numbers, you can be pretty sure a property bubble has formed: A 1.7% cap rate is far below what is needed to make this property cashflow. The only reason I can think of why someone might buy this is […]

Real estate invention I work with several hundred real estate investors to determine their residential or commercial property’s habu, highest and best use, how to differentiate themselves from their competition, how to boost cap rates and ROI, how to get tenants to pay more of the share of the costs of running a building, how […]

Take a micro suite with no bedroom (actually there is a living space, which is turned into a bedroom each night via a pull-out coach). Currently, furnished and rented downtown Ottawa for $1,100 a month. Then create in its 14 foot clear height space a mezzanine bedroom that can be used as a main bedroom […]

I have a client who runs a mini storage business whose biggest profit center is not actually renting 10′x10′ or 10′x20′ lockers either heated or unheated, but leasing parking spaces in his graveled lot. Trucks, RVs, trailers, loaders, pickups, backhoes… all find a resting place in his yard, and the more local ordinances the municipality […]

The Cap Rate Most real estate professionals do not use IRR, internal rate of return, calculations—they use cap (capitalization) rates to compare one project with another. The cap rate is an approximate assessment of ROI, return on investment, as all financial measures are anyway. But they are more approximate than the IRR is, in my […]

[guest post by Robin Chahal, IT specialist, real estate investor] When analyzing real estate deals, my biggest problem is self deception. I fall in love with a bad property because I like the trees in the backyard. Then I run away from great deals because the bathroom smells funny. I’ve learned I can’t trust my emotional brain […]