Cap Rate Calculator
Get a property's capitalization rate and net operating income in seconds — the clean, financing-free way to compare deals.
✏️ These numbers were filled in from a shared link — change anything to make it your own.
How cap rate works
cap rate = annual NOI ÷ purchase price, where NOI = (rent − operating expenses) × 12. It deliberately ignores your mortgage so you can compare any two properties on equal footing.
Want your actual cash return with a loan factored in? Use the Rental Property Calculator.
General information, not investment advice.
Frequently asked questions
How do you calculate cap rate?
Cap rate = net operating income (NOI) ÷ purchase price. NOI is your annual rental income minus operating expenses — taxes, insurance, maintenance, vacancy, and management — but not the mortgage. Multiply by 100 for a percentage.
What is a good cap rate?
It depends on market and risk, but many investors target 5–10%. Prime, low-risk areas trade at lower cap rates; higher-risk areas demand higher ones. Because cap rate ignores financing, it lets you compare properties directly.
Why does cap rate exclude the mortgage?
So the number reflects the property itself, not your particular loan. Two investors with different down payments and rates get the same cap rate — which makes it a clean comparison tool. For your actual return with financing, use cash-on-cash instead.