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Noseberry Digitals
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Free Cap Rate Calculator for Real Estate Investors

Noseberry Digitals' free Cap Rate Calculator computes the unleveraged yield on any property in seconds. Enter three inputs - purchase price, annual gross rental income, and operating expenses (taxes, insurance, maintenance, management fees, excluding mortgage) - and the tool instantly returns Net Operating Income (NOI), cap rate as a percentage, and a market-context rating from poor to exceptional. Built for real estate investors, brokers, and analysts who need a fast, formula-accurate read on a deal's top-line economics before deeper underwriting.

Your numbers

Enter the deal's top-line economics. Results update as you type.

Cap rate
8.40%Exceptional
Net operating income
$42,000
Property value
$500,000
Gross income
$60,000
Operating expenses
$18,000
How this is calculated

Cap Rate (%) = (NOI ÷ Property Value) × 100

NOI = Gross income − Operating expenses

Cap rate is a market-comparable measure. It deliberately ignores financing so you can compare assets like-for-like.

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FAQ

Common questions

What's a good cap rate?
Most stable urban U.S. multifamily deals trade between 4% and 6%, that's the market average. 6%–8% typically signals a stronger yield (often secondary markets or value-add). Above 8% can be exceptional, but it usually comes with more operational or location risk.
Is cap rate the same as ROI?
No. Cap rate ignores financing, it's a property-level yield used to compare assets. ROI (and cash-on-cash return) account for your loan, your equity, and your actual out-of-pocket investment, so they reflect what the deal returns to you personally.
How does cap rate change in different markets?
Trophy markets like Manhattan, San Francisco, and central London often trade at 3%–5% caps because investors accept a lower yield for safety and appreciation. Tertiary markets and higher-risk asset classes can run 7%–10%+ to compensate. Always benchmark against comparable trades in the same submarket.
Should I include property management fees?
Yes, even if you self-manage. Underwriting management at 6%–10% of gross income gives you a like-for-like cap rate vs. institutional buyers and protects you if you ever hand the asset off. Skipping it inflates NOI and overstates your cap rate.
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