Cap Rate Calculator
Sizing up a rental? Estimate the cap rate, net operating income, gross yield, and monthly net from the price, rent, expenses, and vacancy — the quick numbers landlords and investors compare.
NOI ÷ purchase price. A standard way to compare rental returns before financing. An educational estimate, not investment advice — verify rents, expenses, and local rules.
How this is calculated
effective rent = monthly rent × 12 × (1 − vacancy %)
NOI = effective rent − annual operating expenses (taxes, insurance, maintenance, management — excluding the mortgage)
cap rate = NOI ÷ purchase price and gross yield = annual rent ÷ purchase price
Cap rate compares rental returns before financing, so it is independent of your loan (cash-on-cash return is the metric that factors in a mortgage). Results are only as good as the rents, expenses, and vacancy you enter — verify them and local rules before relying on the numbers.
This is an automated estimate, not legal, financial, or appraisal advice. Consult a licensed professional for matters affecting your specific situation.
Common questions
What is a cap rate?
The capitalization rate is a property's net operating income (NOI) divided by its purchase price, shown as a percentage. It's a quick way to compare rental returns before financing.
What is a good cap rate?
It depends on the market and risk — investors often look in a general range of about 4–10%, with higher cap rates meaning more income relative to price (and often more risk or work). Compare against similar properties in the same area.
Does cap rate include the mortgage?
No. Cap rate is based on NOI, which excludes mortgage payments, so it compares properties independent of how they're financed. Cash-on-cash return is the metric that factors in your loan.
Educational estimate only, using figures you enter — not investment, financial, or tax advice. Verify rents, expenses, vacancy, and local rules. LMH Venture Group LLC d/b/a ListMyHomes.com™ is a licensed Tennessee real estate firm that acts only as a neutral facilitator.