As a buyer once you've purchased a new facility - improving a facility via operations and/or capital management. As a seller - one example: it's common to see total expenses not being accurately represented to potential buyers, which can produce an inaccurately low cap rate. Thanks Martyn!
@@SelfStorageIncome Thank you. I've been struggling with the idea of the cap rate/value equation. It seems that you need the cap rate to calculate the value, but you can't get the value without the cap rate?? Does this equation also change depending on whether you are the seller or buyer? Amazing videos, thank you!
Cap rates are quite the conundrum for sure and I'll be the first to tell you that they drive me crazy haha. Essentially the equation stays the same, but sellers and buyers can definitely look at cap rates differently (almost always). I might do a video on this here soon to go more in depth into cap rate details. Thanks again Martyn!
Mind blowing information! Thank you Aj
It's a pleasure! Thanks a ton for the support Jerry! Always great to know all this video work is providing some good value haha, it's a process!
How can you reduce a cap rate?
As a buyer once you've purchased a new facility - improving a facility via operations and/or capital management.
As a seller - one example: it's common to see total expenses not being accurately represented to potential buyers, which can produce an inaccurately low cap rate.
Thanks Martyn!
@@SelfStorageIncome Thank you. I've been struggling with the idea of the cap rate/value equation. It seems that you need the cap rate to calculate the value, but you can't get the value without the cap rate?? Does this equation also change depending on whether you are the seller or buyer? Amazing videos, thank you!
Cap rates are quite the conundrum for sure and I'll be the first to tell you that they drive me crazy haha. Essentially the equation stays the same, but sellers and buyers can definitely look at cap rates differently (almost always). I might do a video on this here soon to go more in depth into cap rate details. Thanks again Martyn!
That would be great, thanks AJ. I guess ultimately it comes down to understanding weather you're paying/asking the right price for a facility.
Increasing NOI increases VALUE. It does not change a cap rate.