Annual NOI
$27,000
Gross rent $38,400
Finance
Cap rate calculator
Estimate cap rate, NOI, implied property value, benchmark range, and cash-on-cash return for rental property and commercial underwriting.
Residential and commercialSimple and ProNOI underwritingMortgage leverage
Strategy
Quick residential estimate — purchase price and monthly cash flows.
Property details
Financing
Add mortgage leverage to estimate cash-on-cash return.
Include mortgage
Simple worksheet
5.1%
Capitalization rate
Cap rate: 5.1%
NOI of $27,000 on a $525,000 price implies a 5.1% cap rate.
Within the Residential 4%–10% referencevs sector
Purchase price
$525,000
Denominator in the cap rate formula.
Benchmark range
Residential 4%–10%
Within the Residential 4%–10% reference
The result is 5.1% against the Residential 4%–10% benchmark.
Portfolio analysis
Saved scenarios
Save the active calculation to compare different underwriting scenarios.
Need a change for Cap rate calculator?
About this calculator
Method, formulas, and limits.What this does
Estimates capitalization rate, net operating income (NOI), implied property value, and cash-on-cash return for residential and commercial properties. Simple mode uses rent and expenses; Pro mode supports itemized underwriting and value solving.
Who it is for
For real-estate investors, rental-property owners, and commercial underwriters comparing deal profitability or how financing changes cash-on-cash return.
How it works
NOI comes from direct input or rent and expenses, then is divided by property value to calculate the cap rate. Value mode solves for price from NOI and a target cap rate. Mortgage mode subtracts debt service from NOI and divides by cash invested.
Limitations
Cap rate does not include financing unless mortgage mode is enabled, and it does not model taxes, depreciation, capital improvements, or tenant turnover. Benchmark ranges are general guides, not local advice.
Key calculations
- Cap rate
- Cap rate = NOI ÷ property value.
- NOI
- NOI = gross rental income − vacancy loss − operating expenses.
- Cash-on-cash
- Cash-on-cash return = annual cash flow after debt ÷ cash invested.
Reference ranges
- Residential
- A common residential reference range is 4%–10%; neighborhood risk and turnover can move the result.
- Commercial
- A common commercial reference range is 5%–12%; lease quality, tenant mix, leverage, and demand matter.
How to use it
- 1.Choose the modeUse Simple for residential rentals or Pro for NOI-driven underwriting.
- 2.Enter income and costsAdd rent, NOI, or itemized expense details for the active view.
- 3.Review the benchmarkCompare the cap rate with the selected residential or commercial range.
- 4.Add mortgage assumptionsEnable the mortgage block to compare annual cash flow and cash-on-cash return.
There is no universal target. Property type, risk, financing, and local market conditions determine whether a result is attractive.
Divide annual NOI by property value or purchase price. This calculator can also solve for implied value when NOI and a target cap rate are known.
Not always. A higher cap rate can reflect more yield or more risk, such as weaker tenants, volatile expenses, or a less desirable location.
Cap rate ignores financing. Cash-on-cash return subtracts debt service from NOI and divides the remaining cash flow by the cash invested.
NOI is income after vacancy loss and operating expenses such as taxes, insurance, repairs, management, utilities, HOA, and other operating costs. It excludes debt service and income taxes.
Yes. Save up to three scenarios in the compare tray; each saved scenario keeps its inputs and shows its key results side by side.
Simple mode uses monthly rent and one expense total for a quick residential check. Pro mode adds itemized expenses, property type, NOI tasks, and value solving.
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