Free calculator
Cap Rate Calculator
A cap rate calculator divides a property's net operating income (NOI) by its value to give the capitalization rate — the unlevered yield the market uses to price commercial real estate. Enter NOI and value below to compute it instantly.
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Formula
Cap Rate = Net Operating Income (NOI) ÷ Property Value
Frequently asked questions
- What is a good cap rate?
- It depends on asset class, market, and risk: stabilized core assets in strong markets often trade at lower cap rates (higher prices), while value-add or secondary-market deals trade at higher cap rates. A cap rate is a relative pricing signal, not a universal target.
- Does cap rate include debt?
- No. Cap rate is an unlevered metric — it uses NOI, which is before debt service — so it reflects the property's yield independent of financing.
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