{
  "@context": "https://schema.org",
  "@type": "Dataset",
  "name": "What is a good cap rate for rental property?",
  "description": "A good cap rate is 5–8% in most US markets in 2026. Primary-metro class-A property trades at 4–5.5%, secondary-market multifamily at 6–8%, and anything above 10% usually signals higher vacancy, deferred maintenance or a weaker submarket rather than a bargain.",
  "url": "https://www.revenuelab.fyi/answers/what-is-a-good-cap-rate-for-rental-property",
  "dateModified": "2026-08-12",
  "creator": {
    "@type": "Organization",
    "name": "RevenueLab",
    "url": "https://www.revenuelab.fyi"
  },
  "license": "https://creativecommons.org/licenses/by/4.0/",
  "keywords": [
    "Cap Rate Calculator",
    "Rental Property ROI Calculator",
    "Commercial Property ROI Calculator"
  ],
  "distribution": {
    "@type": "DataDownload",
    "contentUrl": "https://www.revenuelab.fyi/api/public/page.json?path=answers%2Fwhat-is-a-good-cap-rate-for-rental-property",
    "encodingFormat": "application/json"
  },
  "json": {
    "type": "answer",
    "question": "What is a good cap rate for rental property?",
    "shortAnswer": "A good cap rate is 5–8% in most US markets in 2026. Primary-metro class-A property trades at 4–5.5%, secondary-market multifamily at 6–8%, and anything above 10% usually signals higher vacancy, deferred maintenance or a weaker submarket rather than a bargain.",
    "tableTitle": "Cap rate bands by property profile",
    "columns": [
      "Property profile",
      "Cap rate",
      "Read"
    ],
    "rows": [
      {
        "label": "Class A, primary metro",
        "value": "4.0–5.5%",
        "note": "Priced for stability"
      },
      {
        "label": "Class B, secondary metro",
        "value": "5.5–7.5%",
        "note": "Balanced risk/return"
      },
      {
        "label": "Class C / value-add",
        "value": "7.5–10%",
        "note": "Capex and vacancy risk"
      },
      {
        "label": "Small multifamily, tertiary",
        "value": "8–11%",
        "note": "Thin resale market"
      },
      {
        "label": "Short-term rental converted",
        "value": "Not comparable",
        "note": "Use cash-on-cash"
      }
    ],
    "context": "Cap rate is net operating income divided by price, and it deliberately excludes financing — which makes it a clean way to compare properties and a poor way to judge your actual return. Two investors buying the same building at a 6.5% cap can end up with wildly different cash-on-cash returns depending on leverage and rate. The other trap is an NOI built on optimistic assumptions: understated vacancy, no capital reserve, and self-managed labour costed at zero can inflate a stated cap rate by two full points.",
    "methodology": "Net operating income after vacancy, management, insurance, tax and a capital reserve, divided by purchase price, benchmarked across market tiers.",
    "dateModified": "2026-08-12",
    "relatedCalculators": [
      {
        "label": "Cap Rate Calculator",
        "to": "/cap-rate-calculator"
      },
      {
        "label": "Rental Property ROI Calculator",
        "to": "/rental-property-roi-calculator"
      },
      {
        "label": "Commercial Property ROI Calculator",
        "to": "/commercial-property-roi-calculator"
      }
    ],
    "relatedReading": []
  }
}