Calculate the capitalization rate for investment properties. Essential metric for comparing investment opportunities.
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Results
Cap Rate
6.00
%
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Formula
Cap Rate = (NOI / Property Value) × 100
How to Use This Calculator
How to Use
- 1
Calculate net operating income (rental income minus operating expenses).
- 2
Enter the property value or purchase price.
- 3
Get the capitalization rate.
Frequently Asked Questions
Frequently Asked Questions
What's a good cap rate?
5-10% is typical, depending on market and property type. Higher cap rates indicate better returns but may have higher risk.
What's NOI?
Net Operating Income = Gross Rental Income - Operating Expenses. It doesn't include debt service (mortgage payments).
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About This Calculator
This calculator uses the formula: Cap Rate = (NOI / Property Value) × 100. All calculations follow industry-standard methods. Results are estimates — always verify with a licensed professional for structural or code-compliant work.
Built and maintained by the CalcSmart team. Last updated March 2026.
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