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Cap rate calculator

Cap rate calculator (capitalization rate)

Cap rate 4.6%
Net operating income (NOI)
8300,00 €

The cap rate is the annual net income (rent minus expenses, excluding the mortgage) divided by the price. It's used to compare the profitability of different properties.

This cap rate calculator works out the capitalization rate of a rental property from its price, monthly rent and annual expenses.

The property’s raw return

The cap rate ignores financing and measures what the property itself yields. It’s the standard metric for comparing real estate opportunities against each other.

FAQ

What is the cap rate?
The capitalization rate: annual net operating income (rent minus expenses, excluding the mortgage) divided by the property's price. It measures the property's raw return on its own, independent of financing.
What's a good cap rate?
It varies a lot by location and risk. As a rough guide, 4-10% is common depending on the market — a higher cap rate usually means higher return, often paired with higher risk.
Why exclude the mortgage from the calculation?
Because financing changes with each buyer's down payment and interest rate. Leaving it out lets you compare the property's own performance against other properties on equal terms.