Finance

Cap Rate Calculator

Find a property's capitalization rate.

Calculated Output

Cap rate (%) 6

Formula: cap rate = NOI ÷ value × 100

Step-by-Step Breakdown

1. Values used:

2. Net operating income (annual) = 24,000 $

3. Property value = 400,000 $

5. Cap rate = 6%

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The math behind it

cap rate = net operating income ÷ property value × 100.

$24,000 ÷ $400,000 → 6%.

Higher better?

Higher cap rate = more income per dollar, but often more risk.