Calculate the capitalization rate of an investment property. Cap rate compares net operating income to value, making it the standard metric for comparing deals.
Exclude mortgage payments — cap rate is unlevered.
No. Cap rate is an unlevered measure, so it excludes financing costs. This lets you compare properties independently of how they are funded.
It varies by market and risk. Higher cap rates usually indicate higher yield with higher risk; lower cap rates often reflect prime, lower-risk locations.
Cap rate is the fastest screening metric in real estate — and the most misused. Learn the formula, NOI, comps, and what a good cap rate really means, with Tier-1 market examples.
Cap rate vs cash flow explained clearly, with worked examples, leverage effects, Tier-1 market nuances, and a decision framework you can apply to real deals today.
Longer leases, tougher financing, and tenant-dependent income. Commercial property rewards preparation and punishes assumptions.
Disclaimer: This calculator provides estimates for informational purposes only and is not financial, tax, or legal advice. Verify figures with a qualified professional before making decisions.
