Compare rental properties on equal footing. Cap rate shows what a property earns relative to its price, before financing.
It depends on the area and property type. Single-family rentals in established neighborhoods often trade at 5–7%, while higher-risk areas run higher. A higher cap rate means more income per dollar, usually with more risk or management.
No. Cap rate ignores financing so you can compare properties. Use cash-on-cash return to see the effect of your loan.