Inputs

Calculate Cap Rate

$

Purchase price or current market value

$

Rental income minus operating expenses

Results

Calculated Cap Rate

8.00%

Excellent (8%+)

Monthly NOI

$2,000.00

Gross Rent Multiplier

8.3

Typical Cap Rates by Property Type

Single Family:4-6%
Multi-Family:5-8%
Commercial:6-10%
Retail:6-8%
Office:5-9%
Industrial:6-10%

Expense Breakdown

• Property Taxes
• Insurance
• Maintenance & Repairs
• Property Management
• Utilities
• Advertising
• Legal & Accounting
• Reserves

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Guide

How to Use This Calculator

  1. Choose your calculation type: Cap Rate, Property Value, or NOI
  2. Enter the required values based on your selection
  3. For Cap Rate: Enter property value and annual NOI
  4. For Property Value: Enter desired cap rate and annual NOI
  5. For NOI: Enter rental income and operating expenses

Understanding Cap Rates

  • • Cap Rate = (Net Operating Income / Property Value) × 100
  • • Higher cap rates = Higher returns but potentially higher risk
  • • Lower cap rates = Lower returns but potentially lower risk
  • • Market factors like location, property type affect cap rates

Common Uses

  • • Compare different investment properties
  • • Analyze market trends and property values
  • • Make informed investment decisions
  • • Manage real estate portfolios effectively

Important Limitations

  • • Doesn't account for financing or mortgage costs
  • • Assumes current income levels will continue
  • • Ignores potential for property appreciation
  • • Market timing and conditions affect accuracy

Investment Tips

  • • Always verify all income and expense figures
  • • Include all operating expenses but exclude mortgage payments
  • • Compare cap rates only between similar properties in similar markets
  • • Consider both current cap rate and potential for improvement