Is it better to buy at a high or low cap rate?

For income and financing, higher. A cap rate above your loan's annual cost, about 8.2% for a 30-year loan at 7.25%, means borrowed money helps your return and the property covers itself. For appreciation and lower risk, buyers accept lower cap rates. Neither is better in the abstract.

A high cap rate is the market's price for risk and slow growth. A low one is the price for stability and expected appreciation. Buying at 9% in a slow town and at 4.5% in a growing suburb are both coherent strategies.

The practical test is your loan. Above the mortgage constant, every borrowed dollar earns more than it costs. Below it, every borrowed dollar loses a little. At current rates that line sits near 8%, which is why income investors want high cap rates now and low cap rate buyers mostly pay cash.