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Real Estate Tool

Cap Rate Calculator

Estimate a property's capitalization rate, net operating income, and value based on income and operating expenses before financing.

Choose whether you want to calculate cap rate, value, NOI, or maximum purchase price.
Enter income, expenses, and purchase price to calculate cap rate.

Enter the property assumptions

Optional. Used only in the result summary.
Income
Total scheduled annual rental income.
Laundry, parking, storage, reimbursements, etc.
Percent of gross income reserved for vacancy.
Annual Operating Expenses
HOA, utilities paid by owner, licenses, etc.
Price / Target
Used to estimate value, required NOI, or max price.

What is cap rate?

Cap rate is a quick way to estimate a property's yield before debt financing. It compares net operating income to the property's price or value.

Cap Rate = Net Operating Income ÷ Property Value

A higher cap rate usually means a higher yield, but it can also signal higher risk, weaker location, older condition, or less predictable income. A lower cap rate may reflect stronger location, better tenants, lower perceived risk, or stronger buyer demand.

Important note

Cap rate does not include loan payments, income taxes, appreciation, depreciation, or future rent growth. It is useful for screening and comparison, but it is not a full investment return analysis.

How to use this cap rate calculator

Find Cap Rate — Enter income, vacancy, expenses, and purchase price. The calculator estimates NOI and cap rate.

Find Value at Target Cap Rate — Enter income, vacancy, expenses, and your target cap rate. The calculator estimates value based on NOI.

Find Required NOI — Enter a purchase price and target cap rate. The calculator estimates the NOI needed to justify that price at the selected cap rate.

Find Max Purchase Price — Enter income, expenses, and a target cap rate. The calculator estimates the maximum price supported by those assumptions.

Disclaimer: This calculator is for educational and planning purposes only. It does not provide financial, legal, tax, investment, lending, or real estate advice. Results are estimates based on the information entered and should be verified before making financial decisions.