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Capitalization Rate (Cap Rate) Calculator

Free cap rate calculator for real estate investors. Calculate NOI, cap rate, and payback period. Compare to Class A/B/C benchmarks.

Formula

Cap Rate = Net Operating Income / Property Value

Example

$500k property generating $42k NOI = 8.4% cap rate

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GET https://leadhunting.app/api/tools/cap-rate-calculator

Frequently Asked Questions

What is a good cap rate for investment property?

Class A multifamily: 3-5%, Class B: 5-7%, Class C: 7-10%. Higher cap rate means higher return but typically higher risk.

Does cap rate include mortgage payments?

No, cap rate is unleveraged. It measures return on property regardless of financing. For leveraged returns, use cash-on-cash return.

How is NOI calculated?

NOI = Gross Operating Income - Operating Expenses. Operating expenses include property tax, insurance, maintenance, management fees, and utilities. Excludes mortgage principal and interest.

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