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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.
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.