Cap Rate Calculator
Calculate the capitalization rate for any investment property instantly. Enter your NOI and property value — get your cap rate in seconds.
Capitalization Rate Valuation Analysis
Unleveraged net operating income yield modeled with standard valuation formulas
Enter Property Details
Monthly rent × 12
Property tax + insurance + maintenance + management (exclude mortgage)
Calculations are modeled using documented standard financial formulas. Projections and debt ratios are analytical scenarios for underwriting evaluation, not guarantees or binding credit approvals.
Published by ScoutHavens. Data benchmarks calibrated against U.S. Census Bureau ACS, Bureau of Labor Statistics, and Freddie Mac PMMS historical releases.
Cap Rate Formula Explained
Where NOI = Gross Rent − Operating Expenses (before mortgage)
Worked example
- A rental is listed at $350,000 and rents for $2,400 a month, so gross rent is $2,400 × 12 = $28,800 a year.
- Property tax, insurance, maintenance and management cost $8,640 a year. The mortgage is not counted.
- NOI = $28,800 − $8,640 = $20,160.
- Cap rate = $20,160 ÷ $350,000 × 100 = 5.76%.
Working backwards: if you need a 6% cap rate on the same income, the most you can pay is $20,160 ÷ 0.06 = $336,000. Use the “I have a target cap rate” mode above for this.
NYC, LA, SF, Boston. Lower risk, higher property values, compressed yields.
Dallas, Atlanta, Phoenix, Nashville. Balance of yield and appreciation.
Smaller cities, rural areas. Higher cash flow but watch for liquidity and vacancy risk.
Representative cap rate benchmarks compiled from 2025–2026 CBRE North America Cap Rate Surveys and National Association of Realtors (NAR) commercial investment reports.
How Haven Models Property Economics
Learn how Haven stress-tests cash flow assumptions, models gross rent yields and standardized expense reserves, and runs Bull / Likely / Bear scenario models.
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Cap Rate — Common Questions
What is a cap rate?
Cap rate (capitalization rate) is the ratio of a property's Net Operating Income (NOI) to its current market value, expressed as a percentage. Formula: Cap Rate = NOI ÷ Property Value × 100.
What is a good cap rate for rental property?
A 'good' cap rate depends on the market and property type. In major metros (NYC, LA, SF), 3–5% is common. In secondary markets (Dallas, Atlanta, Phoenix), 5–8% is typical. Above 8% often signals higher risk or a less liquid market.
What is NOI in real estate?
Net Operating Income (NOI) is gross rental income minus all operating expenses (property taxes, insurance, management fees, maintenance, vacancy allowance) — before mortgage payments or depreciation.
Does cap rate include mortgage payments?
No. Cap rate is calculated before debt service. It measures the property's income potential independent of how it's financed. For a leverage-adjusted return, use Cash-on-Cash Return instead.
How is cap rate different from ROI?
Cap rate ignores financing and measures the property's standalone return. ROI (and Cash-on-Cash Return) factors in your down payment and mortgage, giving you the return on your actual invested equity.
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