Cap Rate Calculator
Relate a property's net operating income to its price,
or solve for value or NOI from the other two.
Cap Rate Calculator
NOI excludes financing costs: do not subtract mortgage payments or interest.
Cap Rate
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Property Value
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Net Operating Income / Year
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NOI per Month
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Value ÷ NOI (years of NOI)
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NOI per 100 of Value
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Sensitivity to the Cap Rate
| Cap Rate | Value (₹) | Change vs Base |
|---|
Assumptions & method
- Cap rate = annual net operating income (NOI) ÷ property value (or purchase price), shown as a percentage.
- NOI = rental and other income actually collected − operating expenses (property tax, insurance, maintenance, management, utilities). NOI excludes mortgage principal and interest and other financing costs, as well as depreciation, income tax and capital expenditure.
- Value = NOI ÷ cap rate. NOI = value × cap rate. The mode selector chooses which of the three figures is calculated.
- Cap rate uses a single year of NOI and ignores growth, future changes in rent, and the holding period. It is a snapshot, not a total return.
- The sensitivity table steps the cap rate by 0.5 percentage points around the base value and shows the effect on value (or NOI), holding the other input constant.
- Results are estimates, not valuations, guarantees or advice.
What is a cap rate?
The capitalization rate expresses a property's annual net operating income as a percentage of its value or price. It answers a simple question: if I bought this property outright, what yearly operating income would I get per unit of price? Because NOI is measured before financing, two buyers using very different loans see the same cap rate, which makes it a convenient way to compare properties or to read how the market prices income. The same relationship can be turned around. Divide an NOI by a cap rate observed in the market and you get an indicative value, or multiply a value by a cap rate to see the NOI needed to support it. Use the mode selector to solve for whichever number you do not have.