Capitalization rate is the ratio between the net operating income produced by an asset and its capital cost (the original price paid to buy the asset) or alternatively its current market value. This calculator can be used to measure a property's value, rate of return, or income stream.
If a property is purchased for $1,000,000 sale price and it produces $100,000 in positive net operating income (the amount left over after fixed costs and variable costs are subtracted from gross lease income) during one year, then:
To calculate cap rate: Enter the current market value and leave the CAP Rate blank
To calculate market value: Enter a CAP Rate and leave the market value blank
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