Cap Rate Calculator

Calculate the Capitalization Rate (Cap Rate) to evaluate the profitability and return potential of a real estate investment.

Property Details

Property Purchase Price ($)

Gross Annual Rental Income ($)

Annual Operating Expenses ($)

Taxes, insurance, maintenance, vacancy (exclude mortgage)

Cap Rate Analysis

Net Operating Income (NOI)$0

Cap Rate0.00%

Overview

The Capitalization Rate (Cap Rate) measures the annual rate of return on a rental property based on the income the property is expected to generate.

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Pro Tips

High Cap Rate: Often implies higher potential return, but may come with higher risk or a less desirable location.
Low Cap Rate: Often implies lower risk, higher property value stability, and potentially better location (lower yields).
NOI calculations exclude mortgage payments (principal & interest). Cash flow includes debt service.

Fun Facts

Formula: Cap Rate = (Net Operating Income / Current Market Value) × 100

Used with this

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