Cap Rate Calculator

Calculate capitalization rate from annual operating income and a property value.

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Use consistent units and periods. Defaults are examples.

Check the assumptions below before relying on a result.

NOI = effective annual income − operating expenses. Cap rate = NOI ÷ property value × 100.

30,000 income less 10,000 operating costs gives 20,000 NOI. On a 250,000 property this is an 8% cap rate.

Compare annual pre-tax cash flow after debt payments with the cash you invested.

Divide annual income available for debt service by annual principal and interest payments.

Estimate monthly cash left after vacancy, operating expenses, mortgage payments and reserves.