- No events.
Tag Archives: bond
Low interest rates are very enticing. I want to suggest caution, because an increase in interest rates will dramatically affect the value of real property. Real estate is a “borrowed money” business. The cost and structure of financing determines the income valuation of the property. Similar to bonds, the value varies inversely to the yield […]
Risk Spread Premium
I just read a short article from a real estate guru. He was talking about the “Risk Spread Premium” on real estate Capitalization (CAP) Rates compared to the 10-year US Treasury bond.
His basic assertion is to compare the difference (spread) between the average CAP rate of income properties to the yield on the […]