Ben  Sage

Ben Sage

Broker

RE/MAX a-b REALTY LTD. BROKERAGE

Mobile:
519-532-1295
Office:
(519) 536-7535 ext. 487
Email Me
Ben  Sage

Ben Sage

Broker

RE/MAX a-b REALTY LTD. BROKERAGE

Mobile:
519-532-1295
Office:
(519) 536-7535 ext. 487
Email Me

Investing Basics: What is Cap Rate?

Cap Rate is used in Commercial and Investment Real Estate to determine the return on investment (ROI) of a given property or portfolio, and can be extremely useful when comparing different investment properties. 

Basically speaking, the Cap Rate is expressed as a percentage, and is determined by subtracting the difference between GROSS OPERATING INCOME and OPERATING EXPENSES to arrive at the NET OPERATING INCOME of a given investment. 

The NET OPERATING INCOME (NOI) is then divided by the asking or purchase price of a property to come up with a percentage rate, known as the CAP RATE.  

Example: Duplex earns $900 per unit per month, plus $350 per year from coin-operated laundry machines.  That is a gross operating income of $21,950.  The Operating Expenses, including property taxes, rentals of water heaters, water/sewer bills, building insurance, and maintenance costs total $6,223 for the year.  That leaves a Net Operating Income of $15,727.  If the asking price of this property is $260,000, the CAP RATE at full purchase price would be 6.05%. 

Cap Rates fluctuate according to market conditions, and building quality / location

As a general rule of thumb, the NICER/NEWER the physical building, and the BETTER the location, the LOWER the CAP RATE, as this is a safer investment that requires less upkeep, repairs, and with the good location, ideally reduced tenant turnover.  The LESS ATTRACTIVE the physical building, the higher the cap rate, as these buildings generally require more maintenance, and can have higher turnover with tenants. 

There are costs that fall outside of this calculation, like the lifetime costs of major systems in a home.  We can do a further calculation with more information about a given property, called a CAP-EX, but that exceeds the scope of this definition. 

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I am a Real Estate Broker with RE/MAX a-b Realty Ltd., in Woodstock Ontario, focused on high quality Real Estate services. My experience selling homes is rich, and my results are unparalleled. My clients attest to my commitment to high quality service. 

In 2017, single family homes listed for sale by Ben averaged 104.1% of asking price, compared to the market average of 99.2%, and sold in an average of 12 days compared to the market average of 29. 

  • Platinum Club for Total Real Estate Commissions for 2017 & 2018
  • 100% club for total real estate commissions for 2010, 2011, 2012, 2014, 2015, and 2016. 
  • "Best Young Professional" award nominee for Woodstock District Chamber of Commerce, 2015
  • Retired Director & Committee member at the Woodstock, Ingersoll District Real Estate Board.
  • Recognized as a top donating individual for Children's Miracle Network, 2016 & 2017

The REAL Ben:

Born and Raised in Woodstock Ontario, I am intrinsically connected with the community. When I am not selling Real Estate for my clients, I can be found hanging out with my family. My wife, Amanda, my sons Nolan and Liam, and our mutt, Nori. 

My family enjoys biking the awesome trails around Woodstock, having dinner at one of the many Oxford County establishments, playing golf at one of the many area courses, and the accessible, inexpensive nature of life in Woodstock.

My rural life keeps me busy, maintaining and upgrading our home just outside of the city. When I have spare time, I like to listen to music, play some guitar or video games, and stay up to date on the latest memes. 

My family loves to travel, and recent trips include a bucket-list-checking voyage to New Zealand and Australia in 2018, a road trip to Acadian Shores Nova Scotia the year before. Upcoming goals include another east coast visit to PEI and New Brunswick. 

We love visiting the family cottage in Port Loring, On, where I pretend to know how to catch pickerel and wakeboard. Really I just secretly like quiet hours floating on a lake. 


One thing I need to mention, though, since you've read this far, is that the true joy I get from my position as a Real Estate Broker, is crafting excellent strategies to capitalize on current market conditions for the benefit of my clients. Taking an idea, strategizing to minimize stress and maximize opportunites given in the market, and turning it in to a reality brings me great happiness. Let's get happy together! 



Specialty: New Residential Construction, Luxury Homes, Investment Properties

Awards: 2017, 2018, Platinum Club, Hall of Fame

Area Covered: Woodstock, Ingersoll, Norwich

Languages Spoken: English