Cap Rate Calculator
Calculate your property's capitalization rate (Cap Rate) to assess its profitability.
What is a Cap Rate Calculator?
The Cap Rate (Capitalization Rate) is a key metric in real estate investing that measures the return on investment (ROI) for a rental property. It is calculated by dividing the annual net operating income (NOI) by the property's value.
Why Use a Cap Rate Calculator?
- Helps investors evaluate rental property profitability.
- Allows easy comparison between different investment properties.
- Provides insights into market trends and property values.
FAQs
How do I calculate cap rate?
Cap Rate is calculated using the formula (Net Operating Income / Property Value) × 100. Use our calculator above for quick results.
What is a good cap rate?
Cap rates vary based on market conditions. Generally, a cap rate between 5% and 10% is considered good, depending on location and risk factors.
Does cap rate include mortgage payments?
No, cap rate calculations do not include mortgage payments. It only considers net operating income and property value.
Why is cap rate important?
Cap rate helps investors determine the potential return on a property investment and compare different properties in the market.
