The metric landlord investors use to compare rental properties - Capitalization Rate.
Cap Rate (Capitalization Rate) measures the annual return on an investment property based on income, without considering financing. It helps compare properties apples-to-apples.
Cap Rate = (NOI ÷ Property Value) × 100
NOI = Net Operating Income (annual rent - annual expenses, NOT including mortgage)
Premium areas, appreciation play, higher prices. Less cash flow.
Good balance of cash flow and stability. Most SA landlord ZIPs.
Higher risk areas, more management needed. Better cash flow.
Cap rate lets you compare deals without worrying about financing. In San Antonio, landlord buyers typically want 7%+ cap rates. Include cap rate in your deal presentations.