Cap Rate & NOI Calculator
Analyze rental property investments with capitalization rate, net operating income, and cash-on-cash return.
Rule of thumb: Operating expenses typically run 35-50% of gross rent (the "50% rule"). Adjust based on property age and condition.
Cap Rate
5.07%
Average market rate
NOI (Annual)
$17,760
GRM
12.2x
Cash-on-Cash (20% down)
-0.6%
Monthly Cash Flow
$1,480
Income Breakdown
Gross Annual Rent$28,800
Less: Vacancy (5%)-$1,440
Effective Gross Income$27,360
Less: Operating Expenses-$9,600
Net Operating Income$17,760
Track actual NOI and cash flow for all your properties
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Frequently asked questions
What is a good cap rate for a rental property?
It depends entirely on your market and risk tolerance — most residential rentals fall between roughly 4% and 10%. Lower cap rates usually mean lower-risk, higher-cost markets; higher cap rates often signal more risk or work. Compare against similar properties in the same area rather than chasing a universal number.
How is cap rate calculated?
Cap rate = annual net operating income (NOI) ÷ purchase price (or current market value), expressed as a percentage. NOI is your effective gross rental income minus operating expenses (taxes, insurance, maintenance, management, vacancy) — it does not include your mortgage.
What is the difference between cap rate and cash-on-cash return?
Cap rate ignores how you finance the property — it measures the asset itself. Cash-on-cash return divides your annual pre-tax cash flow (after the mortgage) by the actual cash you invested (down payment plus closing costs), so it reflects your leveraged return.
Does cap rate include my mortgage payment?
No. NOI is calculated before debt service, so two buyers with different loans get the same cap rate on the same property. Use cash-on-cash return or DSCR to factor in financing.