Tool
Cap rate, NOI and value calculator
Cap rate is net operating income divided by price. A building with $150,000 of NOI priced at $3 million trades at a 5% cap rate. Enter the rents, vacancy and expenses to get NOI, the cap rate at the asking price, and the value at the cap rate you want.
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Estimate only. Check the real numbers in your lease or listing.
How is it calculated?
- Effective gross income = gross rent × (1 − vacancy).
- NOI = effective gross income − operating expenses. Mortgage payments and income tax are not expenses for NOI.
- Cap rate = NOI ÷ price. Value = NOI ÷ cap rate.
Use real numbers: the rent roll, leases and two or three years of statements, not the pro forma in the listing. The cap rate guide covers what moves the rate.
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