About this Cap Rate Calculator
Cap rate is a common real estate return metric that compares annual net operating income with property value. It is an unlevered metric, so it focuses on the property before financing choices.
Who this calculator is for
- Real estate investors comparing rental property scenarios.
- Landlords pressure-testing income, expense, and financing assumptions.
- Buyers and advisors who want transparent investment math from user-entered numbers.
When to use it
- Compare rental properties using the same NOI and value method.
- Estimate an unlevered yield before mortgage structure changes the cash return.
- Check whether an asking price aligns with your own income and expense assumptions.
How to use this calculator
- Enter the estimated property value or purchase price.
- Enter gross scheduled rent and other annual income.
- Enter vacancy loss and annual operating expenses, excluding debt service.
- Review the cap rate and annual NOI.
Key assumptions
- Operating expenses exclude mortgage payments, principal paydown, depreciation, income tax, and owner-specific financing effects.
- Property value is entered by the user and is not estimated from market data.
- All rents, expenses, rates, debt service, costs, appreciation, reserves, and investment amounts are entered by the user.
- Calculations run locally in your browser and are not stored by Calwarden.
- Results are estimates for planning and comparison only, not financial, tax, legal, lending, appraisal, or investment advice.
Accuracy and testing
Review formula sources, default test cases, assumptions, unit handling, rounding rules, and changelog for this calculator.
How this calculator works
Inputs explained
Property value
Purchase price, asking price, or current value used as the denominator for the cap rate.
Gross scheduled income
Annual rent at full occupancy before vacancy or collection loss.
Other income
Laundry, parking, pet rent, storage, reimbursements, or other operating income.
Vacancy loss and operating expenses
Annual vacancy/collection loss and operating costs such as taxes, insurance, repairs, utilities, HOA, and management. Exclude debt service.
Understanding your results
Example scenarios
Stabilized rental
A $500,000 property with $48,000 rent, $2,000 other income, $2,500 vacancy loss, and $18,000 operating expenses has $29,500 NOI and a 5.9% cap rate.
Price sensitivity
If NOI stays fixed, a higher purchase price lowers the cap rate while a lower purchase price raises it.
Key Features
- Instant Calculation
- Private & Secure
- Mobile Optimized
Tips & Best Practices
- Use annual numbers consistently so the numerator and denominator match the formula.
- Separate repairs from capital improvements when comparing NOI across properties.
- Pair cap rate with cash-on-cash return if financing will materially affect the deal.
Glossary of Terms
- NOI
- Net operating income. Rental and other operating income minus vacancy loss and operating expenses, before debt service and income taxes.
- Debt service
- Principal and interest payments on financing. These are excluded from NOI but included in cash flow and DSCR analysis.
- Cash invested
- Cash contributed to acquire and prepare the property, such as down payment, closing costs, initial repairs, and other upfront costs.