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Finance Calculators
Cap Rate Calculator
Calculate a property's capitalization (cap) rate from its net operating income and current market value.
Capitalization rate
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About the Cap Rate Calculator
Capitalization rate (cap rate) measures a rental property's unlevered annual return, comparing its net operating income to its current market value, independent of financing.
Formula: Cap Rate = (Net Operating Income ÷ Property Value) × 100
Cap rates are widely used to quickly compare income properties in the same market, lower cap rates often reflect lower-risk, higher-demand properties, while higher cap rates can signal more risk or upside.
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