Cap Rate Calculator
Already know your NOI? Get a quick answer. Or build it from the property’s rent and real operating costs.
$21,000 NOI ÷ $300,000 property value
- Annual gross income
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- Vacancy allowance
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- Effective annual income
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- Annual operating expenses
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- Annual NOI
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- Expense ratio
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NOI = gross income − vacancy − operating expenses
Expense ratio = operating expenses ÷ effective income
Your value and NOI carry over. Add the income and expense breakdown in the analyzer to evaluate financing and cash flow.
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What is cap rate?
Capitalization rate compares a property’s annual net operating income with its purchase price or current value. It measures income before financing. It does not include mortgage principal and interest, income taxes, depreciation or capital improvements.
How do I calculate NOI from rent?
Multiply monthly rent per unit by the number of units and 12, then add annual other income. This calculator applies vacancy to rent and other income, matching the Deal Analyzer. Subtract operating expenses to find NOI. For example, $30,000 gross income less $1,500 vacancy and $8,100 operating expenses gives $20,400 NOI. At a $300,000 price, the cap rate is 6.80%.
Is a higher cap rate always better?
Cap rate alone does not show risk, condition, growth or financing costs. Compare properties with similar locations and assumptions, then review cash flow, reserves and debt service in the full analyzer.
What happens when I open the Deal Analyzer?
Build mode transfers your income and expense assumptions, including the units and time periods. Capital reserves start at zero to match conventional NOI; review them alongside financing. Quick mode keeps your known NOI as a reference while you add the missing income and expense detail. Saving uses your existing private Landlord Calculus account.