So in Part 1 I poked holes in the old axiom that the cap rate is a return of investment.  In Part 2 I mathematically proved that the difference between two cap rates for the same property (or extremely comparable properties) is appreciation... yet we also went on to show that the timing.

I'm going to step up on my soapbox for the concept of appreciation being built into cap rates.  Can someone hand me a microphone... please? Appreciation Explains Cap Rate Differences... Not! It's taught in Appraisal 101 that the difference in cap rates is appreciation.  Here's a good quote I found to support that.

The cap rate only.

What Space Has Been Charted As you may know, I've written a lot about cap rates.  Permit me to summarize the key points.

• Variability in cap rates - What Marina Cap Rates Are You Seeing?
• Cap Rate changes in recessions -  Why Cap Rates Go Up in Recessions
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