When considering a new investment, research, and a varying amount of due diligence is paramount, especially when it comes to investing in real estate. If your looking for a rental, whether it be a three bedroom house or a 10-unit apartment complex, then you'd want to read up on Capitalization Rates. When determining if a property is worth investing in, one of the most commonly used tools is a capitalization rate calculation. The calculation essentially looks at the monthly upkeep costs and expenses (property management, utilities, insurance, vacancy, etc) and compares those figures with the monthly income and the current market value of the property. Once calculated you will end up with a cap rate that will give you a pretty accurate idea of the properties potential. Humboldt County usually produces rates between 2-8%, the higher the cap rate, the better the investment. If you are interested in an investment property and would like to find out the cap rate, please let me know!
