Cap Rate Calculator
Calculate a rental property's capitalization rate from NOI and price.
Cap rate
6.00%
Monthly NOI
$2,000
Price at a 6% cap
$400,000
Price at an 8% cap
$300,000
The real-estate yield
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%+.
Reading it both ways
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.
Frequently asked questions
- How does the Cap Rate Calculator work?
- Calculate a rental property's capitalization rate from NOI and price.
- Is the Cap Rate Calculator free to use?
- Yes. The Cap Rate Calculator is completely free, runs entirely in your browser, and requires no account or sign-up. Your inputs never leave your device.
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