Cap Rate Calculator
Capitalization rate for property valuation
Calculator
Calculate Cap Rate
Enter the property value and Net Operating Income (NOI) to determine the capitalization rate. You can also enter a target cap rate to find the implied property value.
Tax, insurance, maintenance, mgmt
Frequently Asked Questions
What is cap rate?
Capitalization rate is the ratio of Net Operating Income (NOI) to property value. A 7%% cap rate means the property generates 7%% of its value in net income per year, before financing costs. It's used to compare properties and estimate value.
What is a good cap rate?
It varies by market and property type. Generally: 4-5%% in expensive urban markets (NYC, SF), 6-8%% in suburban areas, and 8-12%% in smaller markets. Higher cap rates mean higher returns but often come with more risk or less appreciation.
Cap rate vs cash-on-cash: what is the difference?
Cap rate ignores financing — it measures the property's return as if you paid all cash. Cash-on-cash accounts for your mortgage and measures return on the cash you actually invested. Both are useful but answer different questions.
Cap Rate Calculator
Calculate the capitalization rate for any rental property. See NOI, cap rate, and the implied value at different cap rates for quick property comparison.