Cap Rate Analyzer
Analyze a property’s income-producing performance by calculating its capitalization rate, allowing you to compare properties objectively without the influence of financing.
Best suited for: Residential investors • Commercial investors • Landlords
Property Details
Annual Income
Annual Operating Expenses
Net Operating Income (NOI): $
Capitalization Rate: %
Cap rate excludes financing. For leveraged performance analysis, see the IRR Calculator (BPM Pro).
Understanding Your Results
The capitalization rate (cap rate) measures a property’s income performance relative to its value, independent of how it is financed.
- Higher Cap Rate: Generally indicates higher income relative to price, often paired with higher risk.
- Lower Cap Rate: Often reflects lower perceived risk, stronger locations, or higher-quality assets.
- NOI: Net Operating Income represents income after operating expenses but before mortgage payments.
Cap rate is best used as a comparison tool—not a complete measure of investment quality.
Next step (optional):
To understand how financing affects performance, continue to the Cash Flow Calculator.
How This Calculator Works
This calculator subtracts total operating expenses from gross income to determine Net Operating Income, then divides NOI by the property’s value to calculate cap rate.
Key assumptions:
- Operating expenses are annualized
- Financing costs are excluded by design
- Vacancy is not automatically deducted unless entered as an expense
Cap rate simplifies comparison but does not reflect leverage or financing strategy.
When to Use This Calculator
Use the Cap Rate Analyzer when:
- Comparing multiple properties across different price points
- Evaluating commercial or multifamily assets
- Reviewing a property independent of loan terms
- Benchmarking against market cap rates
Common Mistakes This Tool Helps Avoid
- Mixing financing costs into cap rate calculations
- Comparing properties using inconsistent expense assumptions
- Ignoring NOI and focusing only on gross rent
- Assuming a “good” cap rate is the same in every market
Related Tools
Continue your analysis with:
- Cash Flow Calculator – See how financing impacts income
- ROI Calculator – Evaluate overall investment performance
- NOI Calculator – Isolate operating income (BPM Pro)
Important Note
The tools and calculators provided on this website are for informational and educational purposes only. The calculations and results are based on the information you provide and certain assumptions, and are not guaranteed to be accurate or complete. These tools are not intended to provide legal, financial, tax, or investment advice, and you should not rely on them as such.
The results generated by these tools do not constitute a guarantee of future performance, returns, or outcomes. Your actual results may differ significantly based on your specific circumstances, market conditions, and other factors not accounted for in these calculations.
We strongly recommend that you consult with qualified professionals—such as a financial advisor, real estate agent, accountant, or attorney—before making any financial, investment, or business decisions based on the results of these tools. Your use of these tools is entirely at your own discretion, and we are not liable for any damages, losses, or adverse consequences arising from your use of or reliance on these tools.