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Benefits of a Low Capitalization Rate

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.


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
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