Cap Rate Calculator

Calculate the capitalization rate for any investment property. Cap rate helps you compare properties and assess investment potential at a glance.

Property Information

Property Value ($)

Annual Gross Rent ($)

Vacancy Rate (%)

Annual Operating Expenses ($)

Cap Rate

7.40%

Moderate return

Net Operating Income$22,200

Effective Gross Income$34,200

Deal Summary

Average Cap Rate

7.40% cap rate · $22,200 NOI

This $300,000 property generates $36,000 in annual gross rent. After 5% vacancy and $12,000 in operating expenses, your Net Operating Income is $22,200. The cap rate of 7.40% is within typical market range. Your expense ratio of 33.3% is healthy.

Scenarios

Compare different purchase prices or rent assumptions to find the best cap rate opportunity.

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What is Cap Rate?

Capitalization rate measures the rate of return on a real estate investment based on the income the property generates. Higher cap rates indicate higher potential returns but often come with more risk.