{
    "name": "Cap Rate Calculator",
    "url": "https://calculators.geekmidst.com/calculators/capitalization-rate-calculator",
    "markdown": "https://calculators.geekmidst.com/calculators/capitalization-rate-calculator.md",
    "category": "Real estate",
    "description": "Find a property’s capitalization rate from income, vacancy and operating expenses, and the value its NOI supports at your target cap rate.",
    "summary": "The capitalization rate is net operating income divided by value. Turned around, value equals NOI divided by the market cap rate, which is how income property is often priced.",
    "also_called": [
        "Capitalization rate calculator",
        "NOI and cap rate calculator"
    ],
    "applies_to": "Worldwide",
    "last_updated": "2026-10-29",
    "computation": "Results are computed in the visitor’s browser on the HTML page. This API describes the calculator; it does not compute results.",
    "inputs": [
        {
            "name": "value",
            "label": "Property price or value",
            "type": "number",
            "default": "1200000"
        },
        {
            "name": "gross_income",
            "label": "Gross scheduled income (per year)",
            "type": "number",
            "default": "150000"
        },
        {
            "name": "vacancy",
            "label": "Vacancy and credit loss",
            "type": "number",
            "default": "5",
            "unit": "%",
            "optional": true
        },
        {
            "name": "opex",
            "label": "Operating expenses (per year)",
            "type": "number",
            "default": "50000",
            "optional": true
        },
        {
            "name": "target_cap",
            "label": "Target or market cap rate",
            "type": "number",
            "default": "8",
            "unit": "%"
        },
        {
            "name": "currency",
            "label": "Currency",
            "type": "currency",
            "default": "USD"
        }
    ],
    "outputs": [
        {
            "key": "cap_rate",
            "label": "Cap rate",
            "format": "percent"
        },
        {
            "key": "noi",
            "label": "Net operating income (NOI)",
            "format": "currency"
        },
        {
            "key": "effective_income",
            "label": "Effective gross income",
            "format": "currency"
        },
        {
            "key": "expense_ratio",
            "label": "Operating expense ratio",
            "format": "percent"
        },
        {
            "key": "value_at_target",
            "label": "Value at target cap rate",
            "format": "currency"
        }
    ],
    "formula": {
        "text": "EGI = Gross income × (1 − Vacancy);  NOI = EGI − Operating expenses;  Cap rate = NOI ÷ Value × 100;  Implied value = NOI ÷ Target cap rate",
        "variables": {
            "EGI": "effective gross income after vacancy and credit loss",
            "NOI": "net operating income before debt service, depreciation and income tax"
        }
    },
    "worked_example": {
        "inputs": {
            "value": "1200000",
            "gross_income": "150000",
            "vacancy": "5",
            "opex": "50000",
            "target_cap": "8",
            "currency": "USD"
        },
        "steps": [
            "EGI = 150,000 × 95% = 142,500.",
            "NOI = 142,500 − 50,000 = 92,500.",
            "Cap rate = 92,500 ÷ 1,200,000 = 7.71%.",
            "Value at 8% = 92,500 ÷ 0.08 = 1,156,250."
        ],
        "result": "The property yields a 7.71% cap rate; at an 8% market cap rate its NOI supports a value of about 1.16 million."
    },
    "interpretation": "A higher cap rate means more income per unit of price, usually with more risk or less expected growth. If the asking price is above the value at the market cap rate, the price assumes rents or NOI will rise.",
    "assumptions": [
        "NOI is a stabilised, one-year figure.",
        "Operating expenses exclude mortgage payments, capital improvements and depreciation."
    ],
    "limitations": [
        "Cap rate ignores financing, future growth and the time value of money; use a discounted cash flow for detailed valuation."
    ],
    "rules": null,
    "faqs": [
        {
            "question": "Does cap rate include the mortgage?",
            "answer": "No. It measures the property as if bought for cash. Cash-on-cash return is the measure that includes your loan payments."
        },
        {
            "question": "What is a good cap rate?",
            "answer": "There is no universal figure. Cap rates vary by city, property type and interest rates; compare with recent sales of similar buildings."
        }
    ],
    "sources": [],
    "related": [
        {
            "name": "Net Rental Yield Calculator",
            "url": "https://calculators.geekmidst.com/calculators/rental-yield-net-calculator"
        },
        {
            "name": "Cash-on-Cash Return Calculator",
            "url": "https://calculators.geekmidst.com/calculators/cash-on-cash-return-calculator"
        },
        {
            "name": "Vacancy Rate Calculator",
            "url": "https://calculators.geekmidst.com/calculators/vacancy-rate-calculator"
        },
        {
            "name": "ROI Calculator",
            "url": "https://calculators.geekmidst.com/calculators/roi-calculator"
        }
    ],
    "disclaimer": "Returns are illustrations at a constant rate, not predictions or guarantees. Investments can lose value. This is not investment advice.",
    "publisher": "GM¹X CalcVerse"
}