Cap Rate Calculator

What Cap Rate is for

Cap Rate Calculator is the page to open when you need cap rate from measurements you already have. It belongs with the other financial calculators because that is the work this arithmetic supports. Type the entries first. The result stays hidden until you press Calculate, so a half-finished form never flashes a number you might mistake for the answer.

How to fill in this calculator

1. Property Value. Enter the value this part of the job needs.
2. Gross Income. Enter the value this part of the job needs. The unit list on this field includes per month, per year.
3. Operating Expenses. Enter the value this part of the job needs. The unit list on this field includes per month, per year.

The formula in plain language

The Cap Rate result is the standard relationship for this job, applied to the numbers you type and the units on those fields. Loan and interest math here is the standard textbook formula. It is a planning figure, not a lender's offer. Fees, insurance, and a rate that changes will move the real payment. Compare two options with the same term and the same fees included. A lower payment that lasts many more months can cost more in interest.

A worked example

Suppose Property Value is 12 and Gross Income is 8, in the units already selected on those fields. Press Calculate and write down the cap rate result. Change only Property Value to 24 and calculate again. If the result scales the way the formula says it should, the page is reading the form the way you intended. If it jumps by a factor of twelve, the unit on that field is still set to inches while you were thinking in feet, or the other way around.

Rent, value, and the loan against a property are one deal. This cap rate result should be read with price per square foot and cash on cash return.

Mistakes that move the answer

• Leave the unit selector on the unit you actually measured.
• Press Calculate only after every required field is filled. An empty field is not a zero unless you typed zero.
• Round the result to the precision you can buy or build. Extra decimals do not make a tape measure more accurate.

How to check the result

After Calculate shows the cap rate result, redo the last operation with a pencil using the rounded figures on the screen. Matching that check means the inputs were read correctly. If you edit a label or a sentence in this HTML file, reload the page. The form and this article both live in the file, so the edit is what visitors will read.