Cap Rate Calculator
Result
Cap Rate Calculator Calculate the capitalization rate (cap rate) of a rental property — the annual return relative to its value. Enter the annual rental income, operating expenses, and property value, and this calculator returns the net operating income ( — free online calculator.
Formula
- Compute net operating income and capitalization rate. Excludes financing and income taxes; property value must be positive.
- The main inputs are Annual Rental Income, Property Value, Annual Operating Expenses. Enter them in the units and format shown in the calculator.
- Use monetary amounts, rates and time periods exactly as labeled; the result reflects the assumptions entered on this page.
- Changing any input above recalculates the result with the same calculation engine used by this page.
Example: Cap Rate
- Annual Rental Income: 24000
- Property Value: 320000
- Annual Operating Expenses: 4000
24,000 − 4,000 = 20,000 NOI; on a 320,000 property, cap rate = 6.25%.
Sample result: Calculating…
Frequently asked questions
What does the Cap Rate calculate?
Cap Rate Calculator Calculate the capitalization rate (cap rate) of a rental property — the annual return relative to its value. Enter the annual rental income, operating expenses, and property value, and this calculator returns the net operating income ( — free online calculator.
Which values should I enter?
Enter Annual Rental Income, Property Value, Annual Operating Expenses using the units and format shown beside each field.
What formula does this calculator use?
The calculator uses the following relationship: NOI = annual rental income − annual operating expenses; cap rate (%) = NOI / property value × 100..
Why might my result differ from another source?
Results can differ when another source uses different units, rounding rules, conventions or assumptions. Compare the inputs and definitions before comparing results.
Does the result update automatically?
Yes. Changing an input updates the result using the same calculation engine shown on this page.