Rental Cap Rate Calculator
Capitalization rate for a rental property.
Enter your values
Enter the monthly rent income you are working with.
taxes, insurance, maintenance, HOA
Enter the purchase price you are working with.
Results update instantly as you type — no submit needed. Your values are remembered on this device, and the shareable link reopens the calculator with exactly these numbers.
- Cap rate
- 5.6%
- Annual NOI
- $16,800.00
- Annual gross rent
- $24,000.00
- Annual expenses
- $7,200.00
Quick answer
Cap rate is annual net operating income divided by the property's purchase price, expressed as a percentage.
cap rate = NOI / purchase price x 100
At a glance
| What it does | Capitalization rate for a rental property. |
|---|---|
| Category | Finance |
| Inputs needed | Monthly rent income, Monthly operating expenses, Purchase price |
| Main output | Cap rate |
| Formula | cap rate = NOI / purchase price x 100 |
| Cost | Free — no sign-up, no download |
How to use the Rental Cap Rate Calculator
- 1Enter the expected monthly rent and monthly operating expenses (not mortgage payments).
- 2Enter the property's purchase price.
- 3A cap rate of 4-10% is typical depending on market and risk; higher isn't always better.
Inputs explained
- Monthly rent income
- Enter the monthly rent income you are working with.
- Monthly operating expenses($)
- taxes, insurance, maintenance, HOA
- Purchase price
- Enter the purchase price you are working with.
Worked example
Using the values the calculator loads with:
Inputs
- Monthly rent income2000
- Monthly operating expenses600 $
- Purchase price300000
Results
- Cap rate5.6%
- Annual NOI$16,800.00
- Annual gross rent$24,000.00
- Annual expenses$7,200.00
Frequently asked questions
Does cap rate include the mortgage?
No, cap rate is calculated before financing costs — it measures the property's own return independent of debt.
What's a good cap rate?
It varies by market, but 5-8% is commonly considered a solid range for residential rentals.
What do I need to enter into the Rental Cap Rate Calculator?
Just 3 values: monthly rent income, monthly operating expenses, purchase price. Every field starts with a realistic example, so you can change one number at a time and watch the result update instantly.
How does the Rental Cap Rate Calculator work out the answer?
Cap rate is annual net operating income divided by the property's purchase price, expressed as a percentage. It applies the formula cap rate = NOI / purchase price x 100 and shows the working so you can check each step by hand.
Is the Rental Cap Rate Calculator free, and do I need an account?
It is completely free with no sign-up, no download and no usage limit. Everything is calculated in your browser, so the numbers you type never leave your device.
Results are estimates for general information. For medical, legal, structural or financial decisions, confirm with a qualified professional.