What Ratio Of NOI To Price Should I Be Looking For?
for rental income properties?
And where/how can I find these types of deals?
Currently the best NOI to Price ratios I've found are 5% or lower. So far I've looking in more expensive markets like nj shore, hawaii, san diego (pac beach), manhattan, etc.
thanks for any help.
-J
If I'm not mistaken, you're talking about capitalization rates, and in your case, 5% is extremely low(of course, it may be norm on those expensive markets). I personally can't think of buying anything that has less than 9% cap rate.
This is one of the most comprehensive article I've read.
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&sid=467
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I'm with compwhiz
Cap is NOI/Price.
I'd NEVER go lower than 9% unless you know something that no one else does or if you know you can greatly increase the income from where it is at.
I'd shoot for 10% and up.
I wish I could get 10% cap rate.
In my market the best I can get is 6 or 7%. What would you guys do if you lived here? move? stop investing?