Got my cape in this weekend. It is originally part of a US Army pup tent, just like the Return of the Jedi movie version. (The picture at left is Boba's Empire Strikes Back armor, slight differences throughout. You'll notice that cape is different. I'm actually building the Jedi version of his armor.
So I tattered the ends and added holes and pulls:
To do that, I used my wife's fabric rotary cutter...
The cape will hang from the left shoulder armor, something like this:
I also received a custom recreation of a 1970's scuba diver's buckle. This is what was used to hold the jetpack around Boba's waist.