Free Tool
The Cap Rate Calculator
The cap rate is the yield a property throws off before financing — the cleanest way to compare one deal to another. Enter the price and the income, and see the going-in cap rate and the net operating income behind it. No sign-up required.
The deal
Going-in cap rate
Net operating income divided by price — the unlevered yield at what you pay today.
In the range we target on verified income.
A simplified model for education, using a flat expense ratio. Not investment advice.
What the cap rate does — and doesn’t — tell you
The capitalization rate is a property’s net operating income divided by its price. It is the yield the real estate produces on its own, before any loan — which is exactly why it is the fairest way to compare two deals. A higher cap rate means more income per dollar of price; a lower one means you are paying more for each dollar of income.
But a cap rate is only as honest as the NOI beneath it. A number built on the seller’s projected rents rather than today’s actual collections will always look better than the deal really is. We underwrite the cap rate on verified, in-place income — and treat a going-in cap above 9% as a flag to investigate, not a bargain to celebrate. The numbers every investor should know → · More free calculators →
Free Playbook
The numbers, in plain English.
The cap rate is one figure from our free Playbook — the plain-English guide to evaluating an apartment deal, and the sponsor behind it, like an institution.