Calculators
Cap Rate Calculator
Calculate a property's net operating income and cap rate, and the value implied by a target cap rate.
- Runs in your browser
- Nothing uploaded
The tool
Enter your numbers below. Results update as you type, and nothing leaves your browser.
Everything you enter stays on your own machine. Nothing is sent to us or to anyone else, which you can confirm in your browser network tab.
What people use it for
- Comparing investment properties
- Estimating value from NOI
- Checking a broker's pro forma
- Pricing an offer
About this tool
What the Cap Rate Calculator does
The capitalisation (cap) rate is a property’s net operating income divided by its price. It shows the unlevered return a property produces before financing, which lets investors compare properties quickly. Turning it around, NOI divided by a market cap rate gives an estimate of value.
Formula
- Effective gross income = rent × (1 − vacancy) + other income
- NOI = effective gross income − operating expenses
- Cap rate = NOI ÷ price
- Value = NOI ÷ market cap rate
Worked example
Using the starting values in the calculator above:
| Input | Value |
|---|---|
| Purchase price or value | $850,000 |
| Gross annual rent | $96,000 |
| Vacancy and credit loss | 5% |
| Other annual income | $0.00 |
| Annual operating expenses | $32,000 |
| Market cap rate for valuation | 6.5% |
| Result | Value |
|---|---|
| Cap rate | 6.96% |
| Net operating income | $59,200 |
| Value at market cap rate | $910,769 |
| Effective gross income | $91,200 |
| Operating expense ratio | 35.1% |
How to read the result
Cap rates exclude financing, so they compare properties, not deals. Use the rental cash flow calculator to include the mortgage.
Sellers sometimes quote cap rates on optimistic rents or understated expenses. Rebuild NOI from leases and actual bills.
Related calculators
- NOI Calculator: Calculate a property’s net operating income from every income and expense line, with vacancy and the expense ratio.
- Rental Property Cash Flow Calculator: Calculate monthly cash flow, cash-on-cash return and cap rate for a financed rental property, with reserves for repairs and capital expenditure.
- BRRRR Strategy Calculator: Analyse a BRRRR deal: cash invested, cash-out refinance, cash left in the deal, monthly cash flow and cash-on-cash return.
- Fix and Flip Profit Calculator: Calculate profit, return and annualised return on a fix-and-flip, plus the maximum offer under the 70% rule.
Browse every calculator in Real Estate Investing Calculators, or talk to us about real estate websites and marketing.
More tools and services
- 1031 Exchange Calculator
- 401(k) Contribution Optimizer
- 529 College Savings Calculator
- A/B Test Significance Calculator
- Accessible Ramp Calculator
- Accounts Payable Aging Calculator
If you would rather someone did this properly for you, we offer Web Design Services and Website Development, SEO Services: Search Engine Optimization, AI Automation Agency.
Questions
Questions about this tool
The things clients actually want to know — costs, timelines, ownership and what happens after launch.
It depends on location, property type and interest rates. Lower cap rates usually mean lower risk and higher prices.
No. It is based on NOI before debt service.
Divide net operating income by the market cap rate.
Free strategy session
Let’s build something worth finding.
Tell us where you want the business to be in twelve months. We will come back with a costed plan, a realistic timeline, and the numbers we expect to move — no obligation, no jargon.
- 30-minute call, no pitch deck
- Fixed-price proposal in 48 hours
- You own everything we build
Talk to a developer
Not a sales team
- Response time
- Within 1 business hour
- Where we work
- UK, USA & the Gulf
- Contracts
- No lock-in, monthly rolling
- Working since
- 2023