Cap Rate Calculator

Find a property’s cap rate from its income and value, or estimate its value from a market cap rate.

What Do You Want to Find?
$
$
Rent plus other income, before vacancy.
$
Taxes, insurance, repairs, management, utilities. Not the mortgage.
Fractions and decimals both work.
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Cap Rate
Effective gross income
Net operating income
Expense ratio
Value
Gross rent multiplier
NOI per Month

Properties

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PropertyValueNOICap RateRemove

How to Calculate Cap Rate

The capitalization rate is a property's net operating income (NOI) as a percentage of its value. It shows the unleveraged yield, what the property would earn if bought with cash, so it's used to compare properties and to estimate value from income.

NOI = gross income × (1 − vacancy) − operating expenses
Cap rate = NOI ÷ value   Value = NOI ÷ cap rate

Operating expenses exclude mortgage payments, depreciation and income tax.

Worked Example

Value at Different Cap Rates (NOI $100,000)

Cap RateValue

Tips

A lower cap rate means a higher price for the same income, usually in lower-risk locations or property types. Compare cap rates only between similar properties in similar markets, and use realistic expenses: seller figures often leave out management and reserves. For financing and cash flow, see the rental property calculator.