Help with SFR Cap Rate for Deltona FL

[Vlad Suris]

Hey BP Community,

My partner and I are looking to purchase an SFR in Deltona, FL (interested in the southwestern parts of Deltona Lakes) and are having a difficult time figuring out the average Cap Rate for the area. My analysis provides an average Cap Rate of 8.84% for the entire Deltona, FL area. The analysis that I ran included 3 Bed/2 Bath SFR with square footage ranging from 1,100-1,300 and sold prices between $100-120K. It would be greatly appreciated if someone can help us out in this regard so that we do not over/undervalue properties when we run our analysis.

Thank You,

Vlad & Stephen

[Jay Dewberry]

Hi Vlad. The Capitalization Rate is generally used to determine investment value of a multifamily property such as an apartment complex. What it's used for is to compare the NOI against the property value, which can be helpful in quickly seeing how an investment may perform. It's generally not used for single units such as SFR's. Check out this BiggerPockets Blog for additional info. Hope this helps.