Cap Rate Calculator
Calculate the capitalization rate (cap rate) for one or more investment properties from net operating income and value. Compare cap rates side by side to see which property offers the highest unleveraged yield — and learn what 'good' and 'bad' cap rates mean in context.
How to use
- 1
Add one or more properties
For each property, enter the current market value, annual gross rental income and annual operating expenses.
- 2
Read the cap rate
Cap rate = (Gross income − Operating expenses) ÷ Value × 100. The tool computes NOI and cap rate for each property automatically.
- 3
Compare side by side
The comparison table ranks properties by cap rate. The best is highlighted in amber on the cards above.
- 4
Interpret the result
Use the 'What does the cap rate mean?' card to judge whether your cap rate is low, moderate or high for the market.
Common use cases
- Compare two investment properties by their unleveraged yield.
- Quickly screen a listing — is the asking price justified by the rent?
- Benchmark your portfolio's cap rate against market norms.
Limitations
- This calculator produces an estimate only and is not professional real-estate, tax, accounting or investment advice. Stamp-duty brackets, tax rules and fees vary by jurisdiction and change frequently — always confirm current rates with your conveyancer, tax office or financial advisor before signing anything.
- Cap rate ignores financing, tax, depreciation and appreciation. Two properties with the same cap rate can have very different after-tax returns.
- 'Operating expenses' should include property tax, insurance, management, maintenance and a vacancy reserve — but not mortgage principal or interest.
Frequently asked questions
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