Does HousingAlerts tell or show the Cap Rate / Market Cap Rate for Apartment buildings?


HousingAlerts can and should be used to SET the risk adjusted Cap Rate so you can compare deals/properties in different markets on an apples-to-apples (risk adjusted) basis.

For example, a property in a crummy market should sell for less (higher Cap rate) than the 'same' property in a hot appreciating market.

How do you adjust cap rates so you can evaluate properties on a risk-adjusted basis if they're in different markets?

A quick and easy way to evaluate Market Risk (CAP rate) for similar properties in different markets is to use the HousingAlerts "Master Score (Percentile)" at the MSA/City level.

The Hot Market Finder tool ranks each city based on its Master Score.

Hot Market Finder - Master Score

The higher the Master Score ranking, the more likely that property will generate better returns RELATIVE to a similar property in a weaker market.

Markets with a higher Master Score are worth more and should command a higher price (lower CAP rate) than the same property in a weaker, riskier market.

A LOW master score means the opposite... it's a RISKIER market. You should require a higher going-in CAP rate (lower purchase price) for the same type of property but in a riskier market.

Hot Market Finder - Master Score

Last update of the article: 04/15/2020.

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