Cap Rate Calculator 2026
Calculate your investment property capitalization rate instantly. Free, no signup.
Enter Property Details
What is Cap Rate?
Cap rate (capitalization rate) measures the return on an investment property if you paid all cash. It is calculated as Net Operating Income (NOI) divided by property value. Cap rate does NOT include mortgage payments — it measures the property return regardless of financing.
Formula: Cap Rate = NOI / Property Value
NOI = Gross Rent - Vacancy Loss - Operating Expenses
Operating Expenses = Property taxes, insurance, maintenance, management, HOA (NOT mortgage payments)
Looking for a DSCR loan for your investment property? Check DSCR loan rates →
Get Investment Property Loan Quotes
Compare DSCR loans, conventional investment loans, and portfolio lenders in minutes.
Compare Investment Lenders →DSCR Loan Calculator →
Qualify based on rental income only
Investment Property Mortgage Calculator →
Calculate payments and ROI
Cap Rate FAQ
What is a good cap rate for investment property?
A good cap rate depends on location and risk. Generally: 8%+ is excellent, 6-8% is good, 4-6% is moderate, below 4% is low. Most investors target 6-10% for rental properties.
How is cap rate calculated?
Cap rate = Net Operating Income (NOI) / Property Value. NOI = Gross Rental Income - Vacancy Loss - Operating Expenses. Cap rate does NOT include mortgage payments.
What is the difference between cap rate and DSCR?
Cap rate measures property return (NOI / Value), while DSCR measures loan coverage (NOI / Debt Service). Cap rate tells you if the property is a good investment. DSCR tells you if you can qualify for a loan.