Cap Rate Calculator
Calculate a property’s capitalization rate from its price, gross income, and operating expenses, the unleveraged yield used to compare income properties. Calculates in your browser.
Capitalization rate
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Show the math
Cap rate is the unleveraged yield on a property:
NOI = gross income − operating expenses
cap rate = NOI ÷ price × 100
Operating expenses exclude mortgage payments, so cap rate compares properties independently of financing. There's no single "good" cap rate. It varies by market and risk. All math runs locally in your browser.
What this does
A cap rate calculator finds a property’s capitalization rate from its price, gross income, and operating expenses, the unleveraged yield used to compare income properties.
How it works
NOI is gross income minus operating expenses, excluding the mortgage. Dividing it by price gives the yield a buyer earns before financing.
Cap rate = NOI ÷ price
How to use it
- Enter the purchase price.
- Enter gross annual income.
- Enter operating expenses.
- Read the cap rate.
Understanding your result
There is no universal good cap rate, it varies by market, property type, and risk. Cap rate ignores financing so properties compare on their own merits.
Example
$15,000 of NOI on a $250,000 property is a 6% cap rate.
Sources & methodology
Last updated .
Frequently asked questions
How is cap rate calculated?
Cap rate is net operating income divided by price. NOI is gross income minus operating expenses, excluding mortgage payments.
What is a good cap rate?
There is no universal answer, it varies by market, property type, and risk. Higher cap rates often mean higher yield but also higher risk or lower growth.
Does cap rate include the mortgage?
No. Cap rate deliberately ignores financing so properties can be compared on their own merits; cash-on-cash return factors in your loan.
Is my data kept?
No. Everything is computed locally in your browser.
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