To estimate the cost of your property, you will need to know the cap rates for the area in which you are looking to purchase the house. To get the best data, you can consult independent services, such as commercial brokers or appraisers.  If you're looking to buy a house or apartment, there are likely many offers available. You can save time by quickly weeding out those that aren't worth your time. It is worth noting that the historical caps rates were between 8-12 percent. This may be a useful guideline. You can use a 10% cap rate for basic screening. This is a good rule of thumb. All you need is a zero to increase the potential net income. Although it is not the best way to make a decision, it can help you get a good idea of the potential offer and whether it is worth taking the time to read the details. If you see a flat that is for sale for 500,000 Dollars and knows that the rents in that area are approximately 1,000 dollars per month (or 12,000 dollars per year), you will know it is better to move it on (should be about $120,000).