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Mihsaba›Finance›Cap Rate Calculator

Cap Rate Calculator

Calculate capitalization rate from net operating income and property value, before financing effects.

Starting values are an editable worked example.

Choose an example to fill the fields and calculate. Check the measurement units and reporting period.

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How to use

  1. Enter Annual NOI.
  2. Enter Property value.
  3. Calculate, then verify input definitions before comparing properties or periods.

How it is calculated

Cap rate = NOI ÷ property value × 100

Example

NOI of 60,000 on a property worth 1,000,000 gives a 6% cap rate.

Important notes

Cap rate uses NOI before debt service. Do not mix loan payments into operating expenses for this metric.

Worked examples and interpreting results

Worked examples and interpreting results
CaseCalculationResult
Cap rate60000 ÷ 1000000 × 1006 %
50,000 NOI scenario50000 ÷ 1000000 × 1005 %

Frequently asked questions

Does mortgage debt enter cap rate?

Usually no. Cap rate measures property performance before financing using NOI and property value.

Should inputs cover the same period?

Yes. When comparing income, expense, balance or price figures, keep the period and definitions consistent.

Is the result a final property valuation?

No. The calculator gives a numerical relationship only; real decisions also depend on location, market conditions, taxes, financing and risk.