Free Cap Rate Calculator for Rental Property
Enter the price, rent and operating expenses for a rental. The calculator works out net operating income (NOI), cap rate, operating expense ratio and gross rent multiplier. Add a target cap rate and it shows the price that would hit it, which is a handy starting point for an offer. The sample numbers are hypothetical, so replace them with your own.
What the numbers mean
- NOI = effective gross income (rent plus other income, minus vacancy) − operating expenses. Mortgage payments are not an operating expense.
- Cap rate = annual NOI ÷ price. It describes the property's return as if you paid all cash.
- Operating expense ratio = operating expenses ÷ effective gross income.
- Gross rent multiplier = price ÷ gross annual income. It's a rough screen that ignores expenses.
- Price at your target cap rate = NOI ÷ target cap rate.
This calculator counts repairs, CapEx reserves and management in operating expenses. Some sellers and brokers leave reserves or management out, which makes their cap rate look higher. When you compare two deals, make sure both were figured the same way.
Read the full guide: How to calculate cap rate (and what it doesn't tell you).
Want the full version?
Cap rate ignores your loan. To see cash flow and cash-on-cash return with financing, try the free cash-on-cash return calculator or the Rental Deal Analyzer ($19), which adds a five-year projection, a deal score and side-by-side comparisons. Both the Analyzer and the BRRRR & Flip Analyzer ($24) are in the Investor Pack ($39).
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Estimates for planning only. Not financial, lending or tax advice. Jon, Everyone's Landlord