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Had a property manager in Atlanta tell me I was calculating cap rates all wrong
I was grabbing coffee after a lease negotiation and this older guy overheard me talking NOI on the phone. He asked if I was deducting a vacancy factor before the debt service line. I mean I always thought you just use the current income minus expenses. He showed me his napkin math using a 5 year average vacancy and it changed how I look at every deal now. Anyone else learn a basic calculation differently years in?
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beth_butler753d agoTop Commenter
Different markets have different vacancy patterns so your mileage may vary with whatever average you pick.
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dylan2653d ago
You ever try it with a rolling 3 year average instead of 5? That's what finally clicked for me on a duplex I was overpaying for.
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