Cap Rate Calculator

Calculate the capitalization rate for real estate investments. NOI divided by property value.

🏘

Capitalization Rate

Enter the property value and annual net operating income (NOI).

Cap rate
0%
NOI: $0
Net operating income (NOI)
$0
Gross rent multiplier
0
Operating expense ratio
0%
Payback period
0 yrs

Worked example

With the default inputs shown below, this calculator returns the following results:

InputValue
Property value ($)$500,000
Annual rental income ($)$60,000
Annual operating expenses ($)$15,000
ResultValue
Cap rate9.00%
Net operating income (NOI)$45,000/yr
Gross rent multiplier8.3x
Operating expense ratio25.0%
Payback period11.1 yrs

Values shown are produced by this page in your browser; change any input to update them.

How to use the Capitalization Rate

  1. Property value ($) — default $500,000
  2. Annual rental income ($) — default $60,000
  3. Annual operating expenses ($) — default $15,000
  4. Press Calculate to update the results instantly.

Frequently asked questions

Sources & references