Also, you should consider your investment goals. Understanding your investment goals and criteria will help determine what deals you are looking to get and how you can utilize the capitalization rate for the right deal for your investors.
With that being said, appreciation is only a theory and can happen depending on the market. Rent and net operating revenue are likely to be more predictable that the market. Remember, the income of a building isn't your only source of income in real estate.
Bottom line: What does a good caprate look like for multifamily property? There is no one "good caprate real estate" answer to this question. Cap rates are based on many factors including risk appetite, location and cost of living.
As you likely know, cap rate are only one aspect to a deal. They are an important and essential part of any deal, but they are only a single aspect.
A caprate is only a snapshot from the present. The cap rate takes current income and costs. However, the formula does not take into account any new renovations or marketing changes. These changes can lead to a caprate that is higher or lower depending on the length of the investment term.
Cap rate does not take appreciation into account. Multifamily properties may appreciate. This impacts the determining factor for what makes a multifamily property a good investment. As an example, consider the San Francisco cap rate. It is so worth it that the ROI has been low in the past.
Be aware that assets with a steady monthly cash flow don't appreciate as much over time. A high capitalization ratio for the area often produces large cash flows each month but does not appreciate in value over time.