# Cap Rate Calculator

> Calculate real estate capitalization rate from NOI and property value, or back into property value from NOI and a target cap rate. Includes vacancy allowance and operating expense inputs.

**URL:** https://www.calculatoranswers.com/cap-rate-calculator
**Category:** Money

## Quick Answer

Calculate the capitalization rate or property value for real estate. Enter the net operating income (NOI) and property value to see the yield.

## Definition

A cap rate calculator is a real estate investment tool used to evaluate the profitability and potential return of a commercial or residential income-producing property. Capitalization rate is calculated by dividing the property's net operating income (NOI)—which is gross rental income minus vacancy allowances and operating expenses—by the property's current market value or purchase price. The resulting percentage represents the expected unleveraged rate of return. Real estate agents, investors, and underwriters use this tool to compare properties, analyze market capitalization rates, and determine reasonable purchase prices.

## How to Use

1. **Enter Net Operating Income (NOI)** — Type the property's annual income after vacancy allowances and operating expenses are subtracted.
2. **Enter property value** — Input the purchase price or estimated current market value of the property.
3. **Read the capitalization rate** — View the calculated cap rate percentage, or back into value or income by changing the input mode.

## Disclaimer

This calculator provides estimates for educational and planning purposes. Always consult a qualified professional for specific advice on financial, medical, legal, or other regulated decisions.

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