Cap rate calculator

See what a rental property really earns before financing, how that compares with risk-free Treasuries and today's mortgage rates, and how much its value moves if cap rates shift.

The property

Price or value

Units

Rent per unit /mo

Vacancy and bad debt %

Other income /yr

Operating expenses, per year

ZIP code

Fills in a typical property tax rate for the state.

Property tax % of price

Insurance

Management % of rent

Repairs % of rent

Capital reserve /unit

Utilities and HOA

Everything else

Landscaping, legal, accounting, turnover. Leave mortgage payments out; cap rate is measured before financing.

Financing optional

Down payment %

Loan rate %

Amortization

Closing costs %

Set down payment to 100% for an all-cash purchase.

From rent to net operating income

Net operating incomeOperating expensesVacancy

Against the alternatives

A property has to pay you for vacancies, repairs, illiquidity and risk. The spread over Treasuries is that payment.

If cap rates move

Cap rate	Implied value	Change from price

With your financing

Rules of thumb

Cap rate is net operating income divided by price. Net operating income is rent collected plus other income, minus operating expenses, before mortgage payments, depreciation and income taxes. Property tax uses state-average effective rates on owner-occupied homes (Tax Foundation, 2026, from 2024 Census data); rental properties often lose homestead relief and pay more. Market comparisons use the 10-year Treasury near 5.05% and the Freddie Mac 30-year average of 7.03% (late September 2026); investment-property loans usually cost more.