Cap Rate

The Cap Rate (Capitalization Rate) Calculator determines the rate of return on a real estate property based on its net operating income (NOI) and current market value. Cap rate is the real estate industry standard for comparing property investments independent of financing. Enter the property value and either the NOI directly or the gross rent minus operating expenses. The gauge visualization shows where your property falls on the cap rate spectrum — typically 4-6% for premium urban properties and 8-12% for higher-risk or suburban properties. Cap rate removes financing from the equation, showing the property's return as if you paid all cash. This allows fair comparison between properties across markets, sizes, and types. A lower cap rate implies lower risk and higher price relative to income, while a higher cap rate suggests higher risk or better value.