7 Calm Decisions: Cap Rate Calculator That Feels Clear
Calculate NOI and cap rate using property price, income, and operating expenses.
Your Inputs
Enter yearly numbers, or use monthly rent (we’ll convert it).
Purchase price (or current market value).
Used to estimate annual gross rent.
Parking, laundry, storage, etc.
Adjusts income for expected empty time.
Annual Operating Expenses
These are costs to run the property. Do not include mortgage payments.
HOA, utilities (if paid by owner), permits, etc.
Results
NOI and cap rate are calculated instantly.
Cap rate
0%
Cap rate uses NOI (no mortgage included).
Annual gross income
$0
Effective income (after vacancy)
$0
Annual operating expenses
$0
Annual NOI
$0
Enter your numbers and tap Calculate.
Related Tools
Cap Rate Calculator
Cap rate is one of the fastest ways to compare rental properties, but it only helps when you base it on real income and real expenses. This page keeps it simple: you enter price, rent, and operating costs, and you get NOI and cap rate right away.
What Is This Tool?
The Cap Rate Calculator helps you estimate a property’s capitalization rate, often called cap rate. It also calculates NOI (net operating income), which is the income left after normal operating expenses.
People use cap rate to compare one rental property to another without getting stuck on financing details. It’s a quick “how strong is this deal?” check.
How This Tool Works (Simple Explanation)
- You enter the property price (or value).
- You add monthly rent, and we convert it into yearly rent.
- You can add extra income like parking or laundry if you have it.
- You enter operating expenses (taxes, insurance, maintenance, management, and anything else).
- The calculator applies vacancy if you set a vacancy percentage.
- It calculates NOI and then divides NOI by the property price to get cap rate.
Cap rate does not include mortgage payments. That’s intentional, because cap rate is meant to show how the property performs on its own.
Why You Should Use This Tool
It’s easy to overestimate a deal when you only look at rent. This tool forces the important question: after vacancy and operating costs, what’s the property actually producing each year?
That makes it easier to compare listings, evaluate seller claims, and decide what’s worth a deeper look.
Step-by-Step How to Use
- Enter the property price.
- Add the monthly rent and any extra yearly income (optional).
- Set a vacancy rate if you want a more realistic estimate.
- Fill in yearly operating expenses (leave unknown items as zero for now).
- Click Calculate to see NOI and cap rate.
- Adjust numbers to compare different scenarios (higher rent, higher taxes, etc.).
Benefits
- Quickly calculates cap rate using your real inputs.
- Shows NOI so you can see what’s driving the final cap rate.
- Includes vacancy adjustment, not just perfect rent assumptions.
- Works on mobile, so you can use it while browsing listings.
- Makes it easy to compare multiple properties with the same method.
- Helps you spot expensive properties that look good only on gross rent.
- Keeps expenses separated so you can sanity-check each line item.
- No distractions, just the cap rate numbers you came for.
Use Cases
- You’re comparing two rental properties and want a fast ranking.
- You want to verify a cap rate quoted by a seller or agent.
- You’re deciding if a property is worth a full cash flow analysis.
- You want to see how vacancy affects your returns.
- You’re estimating performance for a new rental market or city.
- You’re checking if higher price still makes sense with current rent.
- You want to test the impact of property management vs self-manage.
- You’re evaluating a commercial or multi-unit deal where NOI matters most.
- You’re reviewing a portfolio and want a quick cap rate snapshot.
- You want a simple metric to compare rentals to other investments.
Features
The calculator is built around the numbers people actually use in the field. You can enter rent monthly, but expenses yearly, because that’s usually how bills are quoted. Vacancy is optional, but it’s there when you want a more realistic view.
Results are displayed in plain language, with gross income, effective income, total operating expenses, NOI, and the final cap rate. That way you can quickly check if the cap rate is low because the property is overpriced, or because the expenses are heavy.
FAQs
What is cap rate in simple words?
Cap rate is the property’s yearly NOI divided by the property price. It’s a quick way to see the property’s return as a percentage, without including your mortgage.
Do I include mortgage payments in expenses?
No. Cap rate uses operating expenses only (taxes, insurance, maintenance, management, and similar costs). Mortgage payments are part of cash flow, not NOI.
What if I don’t know all expenses yet?
Start with what you know and leave the rest as zero. Then add estimates later. Even rough inputs can help you avoid deals that clearly don’t work.
What vacancy rate should I use?
If you’re unsure, try 5% as a starting point and then test 8% or 10% to see how sensitive the deal is. Different markets behave differently.
Is a higher cap rate always better?
Not always. Higher cap rates can come with higher risk or weaker areas. Cap rate is a comparison tool, not a full risk report.
Can I use this in any country or currency?
Yes. Just use your local currency consistently. The math stays the same.
Related Tools
Cap rate is great for quick comparisons, but you may also want a rental cash flow calculator for mortgage impact, and an ROI calculator if you’re comparing rentals to other investments. If you’re budgeting personally, a cash flow or budget tool can help you plan your monthly cushion.
SEO-Optimized Conclusion
If you want a fast, clear way to compare rental properties, cap rate is one of the best starting points. Use this Cap Rate Calculator to estimate NOI and cap rate in seconds, using your own rent and expense numbers. Add your details above and run a few scenarios, it’s a simple way to make smarter property decisions.