Is it customary to consider vacancy (2-3 weeks) & repairs in cap rate calculation?[/quote]
I don’t know. That’s what I’m asking.[/quote]
From what I understand, you are supposed to use net operating income to determine cap rates. Yes, you should include *all* expenses, including vacancies, maintenance, taxes, insurance, etc. when trying to determine cap rates.
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FWIW, I could not agree more with flu’s suggestion to have your daughter buy a condo in SD and you carry the note.
My family often did this as well. Follow closely his suggestion to make it 100% legal and official…for all the reasons he’s stated above.
