Cap Rate Calculator | Real Estate Investment

Capitalization rate = Net Operating Income ÷ Property Value. It represents the annual return assuming an all-cash purchase without financing. Many investors and appraisers use cap rates to compare different properties regardless of price.

Gross rental income + other income (parking, laundry, storage) minus operating expenses (property taxes, insurance, maintenance, management fees, utilities). Mortgage payments, depreciation, and capital expenditures are excluded.

Indicative ranges only (not guaranteed): Residential 4-7%, multi-family 5.5-8%, retail 6-9%, office 7-10%. Actual cap rates vary by location, condition, and lease stability.

No. Cap rate is pre-debt (unleveraged). For leveraged returns, look at cash-on-cash return. This calculator uses pre-debt NOI as per industry standard for property valuation.

Add floors or tenants with square footage & annual rent per SF. Gross Rent = Σ(SF × $/SF). Then NOI = Gross Rent – Operating Costs. You can then solve for Cap Rate (if you know the price) or Property Value (if you have a target cap rate).

Mode A solves for Cap Rate when you know the property price and NOI. Mode B solves for Estimated Property Value when you have a target cap rate and NOI. Use Mode A to analyze a specific property. Use Mode B to determine what price you should pay to achieve your desired return.

Prime locations (inner city, near transit, desirable neighborhoods) typically have lower cap rates (higher prices) due to lower perceived risk. Developing or secondary areas may have higher cap rates (lower prices) but potentially higher vacancy or volatility.

No. This is an estimate for informational purposes only. A formal property appraisal requires a physical inspection and detailed market analysis by a licensed appraiser. Always consult qualified real estate and financial professionals before making investment decisions.