Cap Rate Calculator
Evaluate commercial real estate investment returns.
What is Cap Rate Calculator?
The capitalization rate — or cap rate — is the most widely used metric for evaluating commercial real estate investments. It measures the annual return a property generates relative to its market value, independent of financing, making it a pure measure of asset performance.
How to Use This Tool
1. Enter the property's annual net operating income (gross rent minus operating expenses). 2. Input the current market value or purchase price of the property. 3. Click calculate.
💡 Pro Tip: Never compare cap rates across different cities without context — a 4% cap rate in Manhattan and a 4% cap rate in rural Ohio represent very different risk profiles. Always benchmark against local market averages!