What is a good cap rate?

A good cap rate varies depending on the location, property type, and market conditions. Generally, a higher cap rate indicates a higher potential return, but also a higher risk.

What is Net Operating Income (NOI)?

Net Operating Income (NOI) is the revenue a property generates after deducting all operating expenses, such as property taxes, insurance, and maintenance. It does not include mortgage payments or capital expenditures.

How can the cap rate be used?

The cap rate can be used to compare the relative value of similar properties. It can also be used to estimate the potential return on investment for a property.

Cap Rate Calculator (Real Estate)

How to Use This Tool

Open the Cap Rate Calculator (Real Estate) and find the main field: NOI, property value.
Type your values in that field. The placeholder shows an example format (50000, 1000000).
Click "Calculate" to compute the result in your browser.
Read the result in the Result section. Use Copy to paste the output elsewhere.

Learn More About Cap Rate Calculator (Real Estate)

Understanding Capitalization Rate (Cap Rate)

The capitalization rate (cap rate) is a financial metric used to estimate the potential rate of return on a real estate investment. It represents the ratio of Net Operating Income (NOI) to the current market value of the property.

Cap Rate Formula

Cap Rate = (Net Operating Income / Current Property Value) * 100

About

The Cap Rate Calculator (Real Estate) is a tool to determine the capitalization rate of a property. By inputting the Net Operating Income (NOI) and Current Property Value, you can calculate the Cap Rate percentage, which is a key metric in real estate investment analysis.

Examples

Valid NOI and property value.

NOI, property value

Input

{"noi":100000,"property_value":1000000}

Output

Shown in the Result area after you click the action button.

Another valid NOI and property value.

NOI, property value