Enter value, annual income and operating expenses to get NOI and cap rate.
Cap rate
6.00%
Annual income
$36,000
Operating expenses
-$12,000
Net operating income
$24,000
Property value
$400,000
$24,000 ÷ $400,000 = 6.00%. NOI excludes mortgage payments by definition.
This is an estimate for planning only. It is not legal, financial, tax, or underwriting advice. Your lease terms and state or local law control what you can actually charge or require.
Track NOI automatically by managing the property in Ayillo
Cap rate compares properties, it does not value them alone
Cap rate is NOI divided by value. It deliberately excludes financing, so two buyers with different loans can compare the same building on the same basis.
It is only as good as the NOI behind it. A cap rate built on an owner's optimistic expense estimate — no vacancy, no management fee, no reserves — is not comparable to one built on real numbers.
What belongs in operating expenses
Property taxes
Insurance
Repairs and maintenance
Management fee, even if you self-manage
Utilities you pay
HOA dues
Vacancy allowance
Reserves for capital items
Mortgage principal and interest, depreciation, and capital improvements are excluded from NOI.
Frequently asked questions
What is a good cap rate?
It is entirely market and asset dependent. Compare against recent sales of similar properties in the same submarket rather than a national benchmark.
Should I include a management fee if I manage it myself?
Yes. Your time has a cost, and any future buyer will price the property with management included.