The capitalization rate of a newly constructed apartment building will be more than that of a relatively old apartment building,which is comparable in all other aspects.

Question

Quizplus · Accepted Answer

The capitalization rate, or cap rate, is typically higher for older properties due to increased risk and potential for higher maintenance costs, not lower as the question suggests. Newer buildings usually have lower cap rates because they are perceived as less risky investments.

The Capitalization Rate of a Newly Constructed Apartment Building Will