Cap Rate Calculator for Real Estate Investors
Calculate Capitalization Rate for real estate.
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Understanding Cap Rate
The Capitalization Rate (Cap Rate) helps investors calculate the potential return on a property without considering mortgage financing. It compares the property's income to its market value.
Cap Rate Formula
Cap Rate = (Net Operating Income / Property Value) × 100
Frequently Asked Questions
What is a good Cap Rate?
Generally, a Cap Rate between 4% and 10% is considered good. A higher Cap Rate implies higher potential returns but often comes with higher risk.
How do I calculate Net Operating Income (NOI)?
NOI is calculated by subtracting all operating expenses (maintenance, taxes, insurance, management fees) from the total income generated by the property.