Cap rate is the income left over on the property divided by your expenses. It is rental income minus all expenses (excluding loan repayments) divided by the purchase price, inclusive of rehab cost estimates.
We have calculated this for every house within a city block and averaged it to create this map.
Tip: If you are looking to generate income from your rental properties, higher cap rates are helpful. However, avoid chasing the highest cap rates as they tend to be in areas with high risk. You need to balance the two things.
Estimated appreciation in the location over the next 12 months based on our machine learning model of the past several years of trends.
Internal rate of rate is the rate of return at which your net present value equals zero. This is strongly influenced by the pace of appreciation in the area.
5-Year Total Return
One-year appreciation times five years, plus any income from cash flow, divided by acquisition price plus rehab. This assumes a 5 year holding period for comparison purposes.
Average House Price
Average valuations of homes within this city-block.
These are the average property taxes assessed by the local county, city, and school district in every location. If there are municipal utility districts or water districts, these are added too.
Property research across the U.S. has suggested that high property tax rates tend to hold back appreciation. Therefore, if an area has higher property tax than other areas, consider this possibility.