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🏠 Real Estate Tools

Cap Rate Calculator

Calculate net operating income and capitalization rate for investment property analysis.

Property details

Taxes, insurance, maintenance, mgmt fees

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Fill in the details and click calculate.

Frequently Asked Questions

What is a cap rate?

Net operating income ÷ property value — the property's unleveraged annual return. A $30k NOI on a $500k building is a 6% cap. It strips out financing so buyers can compare deals apples-to-apples.

What is a good cap rate?

It is market- and risk-dependent: 4–5% for prime stabilized assets, 6–8% for typical residential rentals, 8%+ for value-add or tertiary markets. Higher cap = more yield and more risk.

What expenses belong in NOI?

All operating costs — taxes, insurance, management, maintenance, utilities, vacancy allowance — but not mortgage payments, depreciation, or capital expenditures. Sloppy NOI math is how bad deals get sold.

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