Cap Rate Calculator

Calculate the capitalization rate to quickly evaluate investment property returns

Cap Rate Calculator

Calculate the capitalization rate to evaluate investment property returns

Input Values

Purchase Price?

Total purchase price of the property

$

Monthly Rent?

Expected monthly rental income

$

Annual Operating Expenses

Property Tax?

Annual property tax

$

Insurance?

Annual property insurance

$

HOA Fee (Monthly)?

Monthly HOA or condo fees

$

Maintenance?

Annual maintenance and repairs

$

Management Fee (%)?

Property management fee as % of rent

%

Vacancy Rate (%)?

Expected vacancy as % of rent

%

Other Expenses?

Any other annual expenses

$

Results

Cap Rate?

Net Operating Income divided by Purchase Price. Higher is generally better.

7.28%

Fair - Average market return

Net Operating Income (NOI)?

Annual rental income minus operating expenses

$18,200

$1,517/month

Gross Rental Yield?

Annual rent divided by purchase price (before expenses)

12.00%

Total Operating Expenses?

Sum of all annual operating expenses

$11,800

39.33% of rent

Understanding Cap Rate

• 10%+ = Excellent investment opportunity
• 8-10% = Good, above-market returns
• 6-8% = Fair, average market returns
• 4-6% = Below average, consider carefully
• Below 4% = Poor investment potential

Ready to put your calculations to work?