Cap Rate Calculator
Calculate real estate cap rate.
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Calculate cap rate
Cap rate is a common way to compare income-producing real estate. Enter annual net operating income and property value or purchase price to calculate the capitalization rate. It is useful for rental property screening, commercial real estate comparisons and quick investment notes.
NOI divided by value
Cap rate uses net operating income before financing. Mortgage payments, income taxes and one-time costs are usually handled separately.
Frequently asked questions
What is cap rate?
Cap rate equals annual net operating income divided by property value.
Does this include loan payments?
No. Cap rate is usually calculated before financing.
Can cap rate be negative?
Yes. If net operating income is negative, the cap rate will be negative.