Cap Rate Calculator
Fill in the values and the answer updates as you type.
How the Cap Rate Calculator works
Cap rate = net operating income ÷ price × 100. NOI = gross income − vacancy loss − operating expenses, with no mortgage payments and no income tax. Value at the target cap rate = NOI ÷ target cap rate, which shows what the income would be worth if buyers in the area expect that return. A higher cap rate means more income per dollar of price, usually with more risk. Example: A $500,000 building with $48,000 of income, 5 percent vacancy, and $16,000 of expenses has NOI of $29,600 and a cap rate of 5.92 percent. At a 6.5 percent target cap rate it would be worth about $455,384.62.
Inputs and results
The Cap Rate Calculator takes 5 inputs and gives 4 results.
What you enter
- Purchase price or value ($) — starts at 500000.
- Gross rental income per year ($) — starts at 48000.
- Vacancy and credit loss (%) — starts at 5.
- Operating expenses per year ($) — starts at 16000.
- Target cap rate for the area (%) — starts at 6.5.
What you get
- Cap rate
- Net operating income (NOI)
- Operating expense ratio
- Value at the target cap rate
Example: Cap Rate Calculator with the starting values
With purchase price or value 500000 $, gross rental income per year 48000 $, vacancy and credit loss 5 %, operating expenses per year 16000 $ and target cap rate for the area 6.5 %, the calculator returns:
| Cap rate | 5.92% |
|---|---|
| Net operating income (NOI) | $29,600 |
| Operating expense ratio | 35.09% |
| Value at the target cap rate | $455,384.62 |
Change any value above and the results update straight away.
Cap Rate Calculator FAQ
How do I use the Cap Rate Calculator?
Enter purchase price or value, gross rental income per year, vacancy and credit loss and operating expenses per year in the fields, then read cap rate, net operating income (noi), operating expense ratio and value at the target cap rate in the result panel. The answer updates as you type, and you can press Calculate or Enter to refresh it. Use “Copy link” to share your exact numbers with someone else.
What does the Cap Rate Calculator calculate?
Capitalization rate and implied value of an income property. It returns cap rate, net operating income (noi), operating expense ratio and value at the target cap rate from the 5 values you provide.
What values does the Cap Rate Calculator start with?
It opens with purchase price or value 500000 $, gross rental income per year 48000 $, vacancy and credit loss 5 % and operating expenses per year 16000 $ so you can see a working result straight away. Replace them with your own numbers, or press Reset to return to these starting values.
Is the Cap Rate Calculator free and private?
Yes. It is free, needs no account, and runs in your browser, so nothing you type is sent to or stored on our servers. See the Privacy Policy for details.
Can I rely on the Cap Rate Calculator for financial decisions?
Treat the result as a well-rounded estimate. Real situations often have details a general calculator cannot know, so confirm financial decisions with a qualified professional. See the Disclaimer for more.