Vacancy Rate & CAP Rate

[Ryan D]

I'm looking to purchase a duplex in an area not far from my home. Seeing as I'm somewhat familiar with the location, I know what rents should be. I also know of several websites such as "Rentometer" and "RentSlicer" which help to further nail down the average rents for an area.

That being said, how do I find the average vacancy rate and cap rate for a specific area? Do I need to call local property management companies? And will they even provide this information to a random caller such as myself? Are there websites out there that will help with my research?

[Steve L.]

Most 1-4 unit investors I know don't talk in cap rates. Gross rent multipliers is what they use more commonly, I don't know why.

I use a service called Zilpy (http://www.zilpy.com/) to determine rents.

One last comment, for 1-4 unit dwellings I am more concerned about the amount of cash-flow and appraised value then market cap rates.

The theory is, if you can have all your costs at 70% of REAL ARV one exit strategy can always be to sell it to an owner-user who buys on emotion and appraised value instead of ROI.