Cap Rate Calculator
Calculate a property capitalization rate from annual net operating income and value.
Formula
Cap rate = annual NOI / property value × 100%
Capitalization rate ≈ (12,000)÷(200,000)×100
How to use
- Enter annual net operating income.
- Enter property value in the same currency.
- Read the capitalization rate.
Examples
- Annual NOI 12,000 on a property worth 200,000 gives 6%.
Frequently asked questions
What is NOI?
Income after operating expenses, before debt service and income tax.
Is this cash-on-cash return?
No. Cap rate uses property value, not your cash invested.
Can the rate be negative?
Yes, if operating expenses exceed income.
Sources
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