Join the waitlist

Cap Rate CalculatorNOI, Cap Rate and Value from Rent and Expenses

What do these figures come to once the work is shown?

Effective gross income, net operating income, the capitalization rate on price and the value implied by a target cap rate.

  • Runs in your browser
  • Nothing stored or sent
  • Free, no sign-up
Your figures
Example figuresIllustrative only. Type over them with your own.
Cap rate
7.20%
NOI as a percent of price
Effective gross income
$117,000
Net operating income
$72,000
Drawn to one scale
Effective gross income$117,000
Net operating income$72,000
Value at target cap rate$900,000
All results
MeasureResult
Cap rate7.20%
Effective gross income$117,000
Net operating income$72,000
Operating expense ratio38.46%
Value at target cap rate$900,000
How this was worked out
Work shownrecomputed as you type
EGI = gross potential rent x (1 - vacancy) + other income
NOI = EGI - operating expenses
Cap rate = NOI / price; value = NOI / target cap rate

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • EGI = gross potential rent x (1 - vacancy) + other income
  • NOI = EGI - operating expenses
  • Cap rate = NOI / price; value = NOI / target cap rate

How it works

The capitalization rate relates a property's income to its price. Net operating income is rent and other income after vacancy, less the costs of running the building. Debt service, depreciation, income tax and capital reserves are left out, so cap rate compares properties regardless of how they are financed.

A higher cap rate means more income per dollar of price and more risk priced in. Use the cap rate on stabilized income. If you pass a target cap rate, the tool shows what NOI is worth at that rate.

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

Are property taxes an operating expense?

Yes. Taxes, insurance, repairs, management and utilities are operating expenses.

Are capital reserves included?

Practice varies. Some lenders deduct them; state your convention when you compare.

Why not use cash flow?

Cash flow depends on the loan. Cap rate is meant to be independent of financing.

Formulas on this page are the standard definitions.

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

Related audit calculators

CalculatorGross Rent Multiplier CalculatorGross rent multiplier from price and annual or monthly rent, and the value implied by a market multiplier.CalculatorCash-on-Cash Return Calculator for Rental PropertyCash invested, annual debt service, annual cash flow, cash-on-cash return and debt service coverage from price, financing and NOI.CalculatorMortgage Payment Calculator with Taxes, Insurance, PMI and HOA (PITI)Principal and interest, monthly property tax, insurance, mortgage insurance and HOA dues, with loan-to-value.
For US CPA firms

Join the CORAA waitlist

CORAA AI drafts audit working papers from your client’s QuickBooks books and does the first pass: lead schedules, tie-out, memos, draft notes and letters. CORAA Network reviewers clear every finding. Your firm reviews and signs.

  • First audit free, so you can judge the quality on a real file
  • Flat fee by entity size; messy books included
  • We work only with CPA firms, never their clients
See how it works →

* required