Free Cap Rate Calculator
Calculate the capitalization rate to evaluate and compare investment properties. Understand your potential return on investment before you buy.
Cap Rate Calculator
Capitalization Rate Analysis
Annual Operating Expenses
Income Analysis
Monthly NOI
What is Capitalization Rate?
The capitalization rate (cap rate) is a key metric used to evaluate the profitability of real estate investments. It represents the rate of return on a property based on its net operating income (NOI) relative to its current market value.
Cap rate helps investors compare different properties and markets, assess risk levels, and determine if a property is priced fairly relative to its income potential.
Cap Rate Formula
Understanding Cap Rate Ranges
Class A properties in prime locations. Lower returns but stable, appreciating assets.
Good balance of cash flow and appreciation. Most common for residential rentals.
Value-add opportunities or secondary markets. Higher cash flow, more management.
Distressed properties or challenging markets. High returns but significant risk.
When to Use Cap Rate
Compare Properties
Quickly compare the relative value of different investment properties regardless of size or price point.
Determine Fair Value
Calculate what a property should be worth based on its income and market cap rates.
Analyze Markets
Compare cap rates across different markets to identify the best investment opportunities.
Ready to Analyze Your Next Investment?
Use our complete suite of calculators to make data-driven investment decisions