Cap Rate Calculator
Calculate capitalization rate for real estate investments. Compare properties using cap rate for investment analysis.
The capitalization rate (cap rate) measures the rate of return on a real estate investment based on expected income. It's essential for comparing investment properties and determining value.
Calculator
Common use cases
- Property acquisition analysis
- Portfolio comparison
- Investment target setting
- Market analysis
How to use
- Enter property purchase price or value
- Input annual net operating income
- Optionally enter target cap rate
- View cap rate and valuation analysis
FAQ
What's a good cap rate?
It varies by market and property type. Generally 5-10%. Higher = higher risk/return. Lower = safer markets.
What's included in NOI?
Gross rental income minus operating expenses (taxes, insurance, maintenance, management). Excludes mortgage payments.
Does cap rate include appreciation?
No, cap rate only measures income return. Total return includes appreciation, which varies by market.
This calculator provides illustrative estimates for planning purposes only and does not constitute financial, tax, or legal advice.