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Benefits of a Low Capitalization Rate

Author: 
Blueprint Management
Publication date:
February 1, 2021
Article Summary: 

Investors in real estate are seeking low capitalization rates as it can indicate a safer investment with potential gains. The capitalization rate (cap rate) is a metric used to assess the value of real estate and its potential risk. A low cap rate means more people are paying for the net operating income (NOI), making it a safe investment with stable returns. It also serves as a store of value and ensures a secure exit strategy. Lower cap rates can offer lower risk but potentially less return, while higher cap rates can offer more return but with more risk. Investing in a low cap property can create a win-win situation with more qualified buyers and potential profits in the future.



Keywords: 

real estate investment, capitalization rate, net operating income, low risk, store of value, safe exit strategy, potential gains.

Source Citation: 
Blueprint Management
Benefits of a Low Capitalization Rate
February 1, 2021
https://blueprintmanagement.ca/blog/benefits-of-a-low-capitalization-rate/
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