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Category: Apartments, Multifamily Tags: Apartments, Cap Rates, Multifamily

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CRE investors often use capitalization rates, or cap rates, as the industry standard measure of expected returns on an asset. Factoring in the asset’s price and produced net income, multifamily investors can better determine the performance potential. Further, they can categorize a property into three asset classes, A, B, and C, to assess the risk associated with the property. Other variables influencing a multifamily property’s risk profile include location, building age, and renter income.

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