Cap Rate Calculator — Free NOI ÷ Property Value Analysis
A cap rate calculator built for investors pricing income-producing property. Enter net operating income and the property value — get year-one unleveraged return, the price implied by any target cap rate, and a market benchmark for 69 US cities. No signup, no spreadsheet — runs in your browser.
What a Cap Rate Calculator Computes
Six investor-grade outputs from one set of inputs — the unleveraged yield plus its inverse for pricing.
Open the Free Cap Rate Calculator
Enter NOI and property value, hit calculate, and see the year-one cap rate plus the price-for-target-cap inverse. Three minutes, no account.
Need a city-median benchmark, a 5-year projection, and sensitivity?
Upgrade to Cap Rate Pro for $29 — get a comps-based market benchmark for your city, a 5-year NOI projection with rent growth and expense inflation, sensitivity analysis on vacancy and rent, and a shareable report URL.
How a Cap Rate Calculator Works
A cap rate calculator runs the canonical NOI ÷ price formula on a single set of inputs. Net operating income is gross annual rent minus the operating expenses that fill out a property's P&L: vacancy allowance, property tax, insurance, HOA, maintenance reserve, and property management. Mortgage payments are deliberately excluded — cap rate measures the asset's return, not the deal's return. Once the NOI is correct, dividing by the property value produces the year-one unleveraged yield, which is the single number investors use to compare properties across markets, price tiers, and asset classes.
The Free Cap Rate Calculator walks you through the inputs in order, then outputs the year-one cap rate and the inverse calculation (the price a buyer should offer to achieve a target cap rate). For long-form context — what a "good" cap rate means in your city, how cap rate relates to cash-on-cash return, and how to stress-test assumptions — the Understanding Cap Rates guide covers the full playbook.
When to Use a Cap Rate Calculator
- Screening listings — Pull the listed price, the gross rent, and the city's typical operating expense ratio. Run the cap rate. If it's far below the city median, ask why before you tour.
- Deciding what to offer — Pin a target cap rate for the market (say, 7% in a secondary Sun Belt metro), then compute the price that hit implies. That is your walk-away number before you even see the property.
- Refinancing or valuing a held asset — Use last year's NOI plus market rent growth to produce a current-year estimate. The cap rate on the refinance appraisal tells you if the bank is valuing the asset properly.
- Comparing across markets — A 5% cap rate in NYC and a 9% cap rate in Memphis do not produce the same outcome at the same dollar rent; the cap rate absorbs the rent growth and risk premium differences. Apples-to-apples comparison lives here.
- Negotiating seller pro forma — If the seller's pro forma uses 0% vacancy, 2% expense ratio, and below-market rents, the cap rate is fiction. Plug in realistic inputs and see where the real number lands.
- Stress-testing — What if vacancy hits 12% instead of 5%? What if insurance jumps 30%? The calculator shows where the cap rate falls — and whether the deal still clears your threshold.
Inputs You Cannot Skip
Two inputs drive 80% of the cap rate result: gross rent and operating expenses. Skimping on either distorts the metric. For rent, pull 3–5 comparable rentals within 0.5 mile from Zillow, HotPads, or RentCast — never quote the seller's pro forma. For operating expenses, use the 50% rule as a sanity check (residential rentals typically run total operating expenses of roughly half of gross rent); break the number out into tax, insurance, vacancy, maintenance, and management and benchmark each line against city medians.
Free tools hit the year-one cap rate plus the inverse. For deeper analysis — a 5-year NOI projection with rent growth and expense inflation, sensitivity analysis on the rent and vacancy assumptions, and a comps-based market benchmark — Cap Rate Pro at $29 on the pricing page covers the rest.
Frequently Asked Questions
Six common questions about cap rate calculators and how to use them.
A cap rate is the unleveraged year-one return of an income-producing property — net operating income divided by the property value, expressed as a percentage. It answers "how much does the asset itself yield, ignoring financing?" — which is why investors use it to compare properties across markets. RealEstateStackHub's free cap rate calculator is at /calculators/cap-rate and the long-form explainer at /guides/understanding-cap-rates.
Divide the property's annual net operating income (NOI) by its value, then multiply by 100 for a percentage. NOI is gross rent minus operating expenses — vacancy, taxes, insurance, maintenance reserve, property management. The mortgage payment is excluded because cap rate measures asset return, not deal return. A property with $60,000 NOI selling for $1,000,000 has a 6% cap rate. The Free Cap Rate Calculator outputs the year-one cap rate plus the inverse (price-for-target-cap) in your browser.
"Good" is market-dependent. Coastal primary metros (NY, SF, Boston, Seattle) trade around 3–5%; secondary Sun Belt metros (Phoenix, Atlanta, Dallas, Tampa) trade in the 5–7% range; tertiary Midwest / Rust Belt metros (Cleveland, Memphis, Indianapolis) often trade at 7–10% or more. The lower the cap rate, the more you're paying for future rent growth and market liquidity. RealEstateStackHub publishes median cap rates for 69 US cities at /markets.
They answer different questions. Cap rate is unleveraged (NOI ÷ asset value, financing ignored). Cash-on-cash return is leveraged (annual cash flow ÷ cash you actually invested). Use cap rate to screen and price properties on equal footing; use cash-on-cash to decide whether to pull the trigger once financing is locked. The full breakdown — including why a BRRRR refi can drive cash-on-cash to infinity while cap rate stays flat — is at /compare/cap-rate-vs-cash-on-cash.
A complete cap rate report covers: NOI breakdown (gross rent minus vacancy, taxes, insurance, maintenance reserve, property management), year-one cap rate expressed as a percentage, the price implied by any target cap rate (the inverse calculation an investor uses during offer negotiations), and a market-median benchmark for the city. Cap Rate Pro at $29 on /pricing adds a 5-year projection with rent growth and expense escalation, sensitivity analysis (vacancy ±, rent growth ±), and a shareable report URL.
The math is mechanical; the accuracy is in the inputs. Three inputs drive most of the error: (1) over-asking rent — pull 3–5 comparable rentals within 0.5 mile from Zillow, HotPads, or RentCast and ignore the seller's pro forma; (2) underestimating operating expenses — use the 50% rule as a sanity check; (3) using the asking price as the property value — for a refinance, value it as a buyer would; for a new acquisition, value against recent comparable sales. The methodology is laid out in /guides/understanding-cap-rates.