Rex says
Money math without the spreadsheet headache. Plug in your numbers and I'll show you exactly where the dollars land.
Try a scenario
Click to load — tweak from there.Inputs
Parking, laundry, pet rent, storage
Result
Cap rate on purchase price
5%
Cap rate on all-in cost
5%
Net operating income
$14,876
NOI per month
$1,240
Effective gross income
$27,185
Total operating expenses
$12,309
Operating expense ratio
45%
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Got your number — what next?
Pick one, it takes 20 secondsHow to use this
- 1Enter purchase price ($).
- 2Enter closing costs ($).
- 3Enter immediate rehab ($).
- 4Enter monthly market rent ($/mo).
- 5Enter other income ($/mo) — Parking, laundry, pet rent, storage.
- 6Enter vacancy & credit loss (%).
- 7Enter property taxes ($/yr).
- 8Enter insurance ($/yr).
- 9Enter property management (% of collected rent).
- 10Enter maintenance & repairs (% of rent).
- 11Enter capital reserves (% of rent).
- 12Enter utilities, hoa & other ($/yr).
- 13Read your cap rate on purchase price on the right — it updates as you type.
- 14Hit Share to keep the scenario or send it to someone.
About this calculator
Cap rate is net operating income divided by purchase price, and it deliberately ignores financing so two properties can be compared on the asset alone. This calculator builds NOI properly: gross rent less vacancy, less every operating expense — taxes, insurance, management, maintenance, capital reserves, utilities, HOA — and specifically excluding mortgage payments and depreciation, which are financing and tax items, not operating ones. It returns the cap rate on purchase price and on all-in cost including closing and rehab, since the second figure is the one that reflects what you actually spent.
Worked example
Using the values the calculator loads with:
Inputs
- Purchase price: 285000 $
- Closing costs: 7000 $
- Immediate rehab: 12000 $
- Monthly market rent: 2350 $/mo
- Other income: 60 $/mo
- Vacancy & credit loss: 6 %
- Property taxes: 3900 $/yr
- Insurance: 1500 $/yr
- Property management: 8 % of collected rent
- Maintenance & repairs: 7 % of rent
- Capital reserves: 6 % of rent
- Utilities, HOA & other: 1200 $/yr
Results
- Cap rate on purchase price: 5.2%
- Cap rate on all-in cost: 4.9%
- Net operating income: $14,875.99
- NOI per month: $1,239.67
- Effective gross income: $27,184.80
- Total operating expenses: $12,308.81
- Operating expense ratio: 45.3%
What each field means
Inputs
- Purchase price ($)
- The purchase price used in the calculation, measured in $. Starts at 285000 $ so you have a working example on load.
- Closing costs ($)
- The closing costs used in the calculation, measured in $. Starts at 7000 $ so you have a working example on load.
- Immediate rehab ($)
- The immediate rehab used in the calculation, measured in $. Starts at 12000 $ so you have a working example on load.
- Monthly market rent ($/mo)
- The monthly market rent used in the calculation, measured in $/mo. Starts at 2350 $/mo so you have a working example on load.
- Other income ($/mo)
- Parking, laundry, pet rent, storage
- Vacancy & credit loss (%)
- The vacancy & credit loss used in the calculation, measured in %. Starts at 6 % so you have a working example on load. Accepted range: 0–50 %.
- Property taxes ($/yr)
- The property taxes used in the calculation, measured in $/yr. Starts at 3900 $/yr so you have a working example on load.
- Insurance ($/yr)
- The insurance used in the calculation, measured in $/yr. Starts at 1500 $/yr so you have a working example on load.
- Property management (% of collected rent)
- The property management used in the calculation, measured in % of collected rent. Starts at 8 % of collected rent so you have a working example on load. Accepted range: 0–20 % of collected rent.
- Maintenance & repairs (% of rent)
- The maintenance & repairs used in the calculation, measured in % of rent. Starts at 7 % of rent so you have a working example on load. Accepted range: 0–25 % of rent.
- Capital reserves (% of rent)
- The capital reserves used in the calculation, measured in % of rent. Starts at 6 % of rent so you have a working example on load. Accepted range: 0–25 % of rent.
- Utilities, HOA & other ($/yr)
- The utilities, hoa & other used in the calculation, measured in $/yr. Starts at 1200 $/yr so you have a working example on load.
Results
- Cap rate on purchase price
- Returned as a percentage and shown as the headline result. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Cap rate on all-in cost
- Returned as a percentage. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Net operating income
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- NOI per month
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Effective gross income
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Total operating expenses
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Operating expense ratio
- Returned as a percentage. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
FAQ
Why doesn't cap rate include the mortgage?
Because financing is a property of the buyer, not the building. Two investors can pay wildly different rates on the same asset; stripping debt out lets you compare the property against other properties and against the local market's prevailing cap rate. Levered returns are measured with cash-on-cash instead.
What's a good cap rate?
It is entirely market-relative. Prime metros with strong appreciation commonly trade at low single digits, while higher-yield secondary and tertiary markets can run considerably higher — and a very high cap rate is usually the market pricing in risk, weak tenant demand, or deferred maintenance rather than a bargain.
Should capital reserves be an operating expense?
Strictly, capital expenditure sits below NOI in commercial appraisal, so purists exclude it. For small residential deals, excluding it produces a cap rate that quietly ignores the roof and the furnace, so including a reserve gives a far more honest number. Just be consistent when comparing to quoted market caps.
Cap rate or cash-on-cash — which should drive the decision?
Use cap rate to judge the asset and the price, and cash-on-cash to judge your position in it. A deal can have a healthy cap rate and terrible cash-on-cash if it is financed badly, and the reverse is possible when cheap leverage flatters a mediocre building.
Accuracy and limitations
- Results are estimates before tax, fees, and inflation unless an input explicitly covers them.
- Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.
- This is educational maths, not financial advice. Check anything contractual with the lender or your accountant.
Related tools
Cite this calculator
Writing about this topic? Grab a citation — every link helps keep these tools free.
RevenueLab. (2026). Rental Property Cap Rate Calculator. Retrieved from https://www.revenuelab.fyi/toolbox/rental-cap-rate
<p>Source: <a href="https://www.revenuelab.fyi/toolbox/rental-cap-rate" target="_blank" rel="noopener">Rental Property Cap Rate Calculator — RevenueLab</a> (2026).</p>
Source: [Rental Property Cap Rate Calculator — RevenueLab](https://www.revenuelab.fyi/toolbox/rental-cap-rate) (2026).