Finance & Money
Cap Rate Calculator - Calculate cap rate based on income and expenses.
Calculate cap rate based on income and expenses.
Formulas and edge cases are reviewed against authoritative references before publication. For methodology, editorial standards, or corrections, use the links below.
Frequently asked questions
What is cap rate?
Capitalization rate measures a property's potential return if purchased with all cash - NOI divided by property value.
Does cap rate include mortgage?
No, cap rate uses NOI before debt service. It shows unlevered return.
Higher or lower cap rate better?
Lower cap rates indicate lower risk/return (prime locations). Higher indicates more risk but potentially better returns.
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About this tool
This Cap Rate Calculator turns your inputs into practical results. Provide Property Value, Annual Gross Income, and Operating Expenses to calculate Cap Rate and Gross Rent Multiplier.
Adjust values to compare scenarios and see how sensitive the result is. The calculation uses the numbers as entered, so double-check units and expect small differences from rounding in the displayed totals.