What is a good cap rate for a rental property?

You've probably learned how to analyze the cap rate

and you've run some numbers on a property,

but you're still kind of stuck saying,

is this a good deal or is it not?

Well, that's the question we're going to tackle

in today's episode of Ask Coach,

and we're getting started right now. Welcome.

My name is Chad Carson.

You can also call me Coach Carson.

And this show is all about investing in real estate,

financial independence, and doing more of what matters.

In just a moment, I'm going to take you to a clip

from a live stream that I did in the past. In this live stream, somebody asked me a question

about analyzing a deal or running the numbers. And more specifically, she had an actual deal that

she was looking at. And she knew that running the cap rate or using the cap rate formula

is one of the several formulas that are important to me when I, running the cap rate or using the cap rate formula is one of the several

formulas that are important to me when I'm running the numbers. She said, Chad, I have a 6.82% cap rate

on this property. I think it's in a good location. I have the cash to buy it. Is it a good deal?

I'm still kind of stuck. So she just didn't know she should pull the trigger because she didn't know if it's a good deal or not. And so in this answer, my answer to that, I share the two main criteria that I use when running when analyzing a deal. I kind of boil it down. You can get all fancy with calculators and spreadsheets, but this is basically what I look at, and I hope you find that helpful.

I've thought about this a lot, and you can make deal analysis really complicated for a long-term

hold. You can do spreadsheets, which I love. Spreadsheets are important eventually, but I've sort

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