Is a 2% cap rate good?

No, not as an income investment. A 2% cap rate means the property yields 2% of its price before the mortgage, about a quarter of what a loan costs at current rates. It only makes sense as a pure appreciation play, and even then the income does little to reduce the risk.

On a $500,000 property, 2% is $10,000 of NOI, roughly $1,980 in monthly rent under typical expenses. Almost no rental trades here on honest numbers; a 2% cap rate usually means a trophy location, a below-market rent, or expenses that overwhelmed a normal rent.

If the rent resets to market soon, the true cap rate may be higher. If the rent is at market, the price is set by something other than income, such as redevelopment potential. At 2%, each $1,000 of NOI is worth $50,000, so the valuation is fragile.