Cap Rate Calculator

Cap rate is net operating income (rent minus all operating expenses, before financing) divided by price — the property's unlevered yield. Prime-market apartments trade at 4–6%; riskier markets and asset types demand 8%+.

Investors also invert it: a property producing $24,000 NOI is 'worth' $400,000 at a 6% cap and $300,000 at 8%. Small cap-rate shifts move valuations dramatically — which is exactly what rising interest rates do to real-estate prices.