Calculator

Cap rate calculator

Calculate capitalization rate from NOI and property value.

The short answer

$60,000 NOI on a $1,000,000 property is a 6% cap rate.

Capitalization rate

Cap rate = NOI ÷ property value

Cap rate
6%
Show the arithmetic
  • 60000 ÷ 1000000 = 0.0600 → 6%
Worked example

$60,000 NOI on a $1,000,000 property is a 6% cap rate.

Assumptions
  • NOI is annual and excludes debt service.
  • Property value is the purchase price or current market value, not the loan balance.

Every figure is calculated from the values you entered. Nothing is fetched from market data, and this is general information rather than financial, legal or tax advice.

Formula

Cap rate = NOI ÷ property value

What you need

  • Annual net operating income
  • Property value

Worked example

$60,000 NOI on a $1,000,000 property is a 6% cap rate.

Assumptions and units

  • NOI is annual and excludes debt service.
  • Property value is the purchase price or current market value, not the loan balance.

Limitations

Every figure is calculated from the values you enter — nothing is estimated from market data. Real outcomes depend on your state, your lease terms and your property. This is general information, not financial, legal or tax advice.

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