CAP RATE CALCULATOR
Get an idea of your ROI from your rental property
Estimated Cap Rate
Please note that this calculator provides an estimate and should not be considered as financial advice.
Yearly Operating Expenses
Net operating income
Purchase Price and Rent
How it works
The Cap Rate Calculator is a powerful tool designed to help real estate investors evaluate the potential profitability of an investment property. It provides valuable insights by factoring in key financial metrics, such as rental income and operating expenses, to determine the property's Cap Rate. Cap Rate, or Capitalization Rate, is a crucial metric used in the real estate industry to assess the return on investment.
Cap Rate = (Net Operating Income / Purchase Price) * 100
Cap Rate (%
Cap Rate, short for Capitalization Rate, is a crucial metric used by real estate investors to evaluate the profitability of an investment property. It is expressed as a percentage and measures the rate of return on the investment based on the Net Operating Income and the purchase price of the property.
Operating Expenses = Property Taxes + Condo Fees + Insurance + Property Management Fees + Reserves + Other Expenses
Operating Expenses are the costs associated with operating the property, including property taxes, condo fees, insurance, property management fees, and any other expenses
Net Operating Income = Gross Income - Operating Expenses
Net Operating Income (NOI)
Net Operating Income represents the income generated from the property after deducting the Operating Expenses. It is the profit generated from the property before considering mortgage payments or financing costs.
Gross Income = Monthly Rent * 12
Gross Income represents the total rental income generated by the property over a year. It is calculated by multiplying the Monthly Rent by 12 (months in a year).