Calculate a rental property's capitalization rate — its net operating income measured against purchase price, independent of financing.
Net operating income (NOI) is your total annual income minus operating expenses — but not your mortgage payment, which cap rate deliberately excludes so you can compare properties on their own merits, regardless of how each is financed.
Cap rate is NOI divided by purchase price (or current market value), expressed as a percentage. A higher cap rate generally signals more income relative to price, though very high cap rates can also signal higher risk in a given market.
Cap rate is a comparison tool, not a full return calculation — since it ignores your financing entirely, use the cash-on-cash return in the ROI calculator to see how a specific mortgage and down payment affect your actual return.
LeasePilot HQ tracks real rent, expenses, and P&L per property — not just estimates.
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