Cap rate
Cap rate = NOI divided by property value.
Finance
About Cap Rate Calculator
Use simple or pro views to review NOI, benchmark range, mortgage leverage, and compare deals on one worksheet.
About this calculator
What this does
Estimates the capitalization rate (cap rate), net operating income (NOI), implied property value, and cash-on-cash return for rental and commercial properties. Simple mode provides a quick cap rate from rent and expenses, while Pro mode supports itemized expense breakdowns and NOI-driven underwriting to find either cap rate or property value.
Who it is for
Real estate investors, rental property owners, and commercial underwriters who need to compare deal profitability. Also useful for anyone evaluating a property purchase and wanting to see how financing affects cash-on-cash return.
How it works
The calculator derives NOI from either direct input or itemized rent and expenses, then divides by property value to get the cap rate. For the value task, it solves for property value from a target cap rate and NOI. An optional mortgage block adds leverage: the calculator subtracts debt service from NOI and divides by cash invested to compute cash-on-cash return.
Limitations
Cap rate ignores financing (unless the mortgage block is used), taxes, depreciation, capital improvements, and tenant turnover costs. The benchmark ranges are general guides and may not reflect your specific market or property class.
Formula
NOI
NOI = gross rental income - vacancy loss - operating expenses.
Cash-on-cash
Cash-on-cash return = annual cash flow after debt / cash invested.
How it works
Step 1
Choose the mode
Use simple mode for residential rentals or pro mode for NOI-driven underwriting.
Step 2
Enter income and costs
Add rent, NOI, or itemized expense details depending on the active view.
Step 3
Review the benchmark
Read the cap rate against the selected residential or commercial range.
Step 4
Add mortgage assumptions
Expand the optional mortgage block to compare annual cash flow and cash-on-cash return.