Multi-Unit Rental Housing Capitalization Rate Range Set for 2024

The Multi-Unit Rental Housing Capitalization Rate Range has been set for 2024, as required by Kentucky Revised Statute (KRS) 132.191(5)(a) 1. d. 

A property valuation administrator (PVA) or taxpayer may determine the value of multi-unit rental housing that is subject to government restriction on use by using the methods specified in KRS 132.191(5). For the 2024 tax year, when valuing such property through an annual net operating income approach to value that uses actual income and stabilized operating expenses that are based on the actual history of the property, when available, and a capitalization rate, the capitalization rate range shall be 9.04% to 10.04%.^1​

  ^​1The “Average Cap Rates” published in the “RealtyRates.com 4thQuarter 2023 Investor Survey” are as follows:

A weighted average of these 4th quarter 2023 cap rates is 8.54%. Adding fifty (50) to 150 basis points to the 8.54% weighted average as required by KRS 132.191(5)(a)1.c.iii, indicates a cap rate range for the 2024 tax year of 9.04% to 10.04%.