Boston saw an increase in cap rate for multifamily income properties last year according to the Multifamily Executive. That is in contrast to a continuing fall in cap rates in many markets across the country.
The article in Multifamily Executive cites a Boston market cap rate of 6.4 during 2011. That compared to a cap rate of 6.2 during 2010. These cap rates are for commercial multifamily properties. For smallers investors interested in investing in 2 to 4 unit “residential” multifamily income properties, the cap rates are difficult to come by. I suggest computing the gross rent multiplier (GRM) to compare properties which I have done many times for you in the past. Check them out and use the GRM to help you figure out which multifamily you want to invest in today.
