Cap Rate Calculator
Analyze rental property investments: cap rate, cash-on-cash return, and ROI.
🏠 Property Details
💰 Financing (optional)
📊 Investment Returns
💵 Annual Cash Flow
🏦 Initial Investment
📋 Income & Expense Breakdown
📌 5 Cap Rate Tips
- ✓ Higher cap rate ≠ better deal — it usually means higher risk (older building, worse location, deferred maintenance).
- ✓ Target 1% rule as a quick filter: monthly rent should be ≥1% of purchase price. A $300K property should rent for $3,000+/mo.
- ✓ Cap rate ignores financing — use cash-on-cash return to compare leveraged deals. Leverage amplifies returns (and losses).
- ✓ 50% expense ratio is a common rule of thumb — if NOI is around half of gross rent, your numbers are reasonable for residential.
- ✓ Stress test with 10% vacancy + 10% maintenance — most landlords underestimate real-world expenses. If it still cash flows, it's a solid deal.
Disclaimer: This calculator provides estimates for educational purposes only and is not financial, tax, or investment advice. Actual returns depend on many factors not captured here (appreciation, tax benefits, repairs, tenant issues, market changes). Always perform thorough due diligence and consult licensed professionals before investing.
Related Real Estate Investment Tools
Cap rate is one of several key metrics serious real estate investors use to evaluate deals. Pair it with the rest of this stack to size up a property's cash flow, financing cost, and overall affordability before you make an offer.
- Rental Property Calculator: Project monthly cash flow, NOI, and 10-year returns for any rental property.
- Mortgage Calculator: Estimate your monthly principal and interest for the loan you'll take on the property.
- Mortgage Affordability Calculator: Find out the maximum purchase price your income and down payment can support.
- Mortgage Early Payoff: See how extra principal payments shorten your loan term and build equity faster.
- House in 5 Years Plan: Build a step-by-step savings and down payment plan to buy your next property.
📚 Resources for Real Estate Investors
The 5 Tips above cover the math, but the best rental property investors pair cap rate analysis with the cash-flow, due-diligence, and tenant-management playbooks below.