Income Approach Valuation Calculator
Estimate what a rental property's annual net operating income supports at your chosen capitalization rate.
$60,000 annual NOI ÷ 6.00% cap rate
Sensitivity uses cap rates one percentage point below and above your assumption. These are scenarios, not a confidence interval.
For example: $60,000 ÷ 0.06 = $1,000,000.
What does this valuation tell me?
This direct capitalization estimate values the property's income before financing. It is not sale proceeds, your equity or an appraisal. A change in cap rate can materially change the estimate even when rent stays the same.
Use a sustainable 12-month income estimate and reconcile missing expenses, concessions, unusual repairs and deferred maintenance. The cap rate and NOI must use the same expense and reserve convention. Selling costs and loan payoff are separate from property value.
For a property with zero or negative NOI, this simple method cannot support a positive income value. That does not mean the property has no value; land, comparable sales or a stabilization plan may require another approach.
The full analyzer includes future-year income valuation for properties with 5+ units. For homes and condos, use this as an income scenario alongside comparable sales; it is not a replacement for a local market valuation.
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