Cap Rate Calculator

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.

For Example...

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:

$100,000 / $1,000,000 = 0.10 = 10%

 

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

Monthly Rent What is the total monthly rent received from the property?
Gross Annual Income This is the yearly rent received from your property
Other Income Enter any additional income the property brings in (i.e. Laundry)
Total Gross This is the annual income plus other income of the property
Vacancy % Estimate a value for the annual expected vacancy duration of the property (5% is common)
Amortized Costs Estimate an annual amortized value for repairs and capital improvements (e.g. a $10,000 roof amortized over 10 years = $1,000)
Maintenance How much was spent on routine maintenance of the property this year?
Utilities How much was spent on utilities for the property this year?
Property Taxes How much was spent on property tax this year?
Insurance How much was spent on insurance for the property this year?
Management Fees How much was spent on property management this year?
Net Operating Income This value is the annual income of the property minus the annual expenses.
Market Value  
CAP Rate  
 


Keith Cook | 360-739-5600 Sally Webb | 360-224-1270 
RealEstate@BuyerMax.com 
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