.calc-wrapper {
font-family: -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif;
max-width: 800px;
margin: 0 auto;
padding: 20px;
background: #ffffff;
border: 1px solid #e0e0e0;
border-radius: 8px;
box-shadow: 0 4px 6px rgba(0,0,0,0.05);
}
.calc-header {
text-align: center;
margin-bottom: 30px;
}
.calc-header h2 {
color: #2c3e50;
margin: 0;
font-size: 28px;
}
.calc-grid {
display: grid;
grid-template-columns: 1fr 1fr;
gap: 20px;
margin-bottom: 25px;
}
@media (max-width: 600px) {
.calc-grid {
grid-template-columns: 1fr;
}
}
.input-group {
display: flex;
flex-direction: column;
}
.input-group label {
font-weight: 600;
color: #555;
margin-bottom: 8px;
font-size: 14px;
}
.input-group input {
padding: 12px;
border: 1px solid #ccc;
border-radius: 4px;
font-size: 16px;
transition: border-color 0.3s;
}
.input-group input:focus {
border-color: #3498db;
outline: none;
}
.calc-btn {
width: 100%;
padding: 15px;
background-color: #27ae60;
color: white;
border: none;
border-radius: 4px;
font-size: 18px;
font-weight: bold;
cursor: pointer;
transition: background-color 0.2s;
margin-bottom: 25px;
}
.calc-btn:hover {
background-color: #219150;
}
#result-container {
background-color: #f8f9fa;
border: 1px solid #dee2e6;
border-radius: 6px;
padding: 20px;
display: none;
}
.result-row {
display: flex;
justify-content: space-between;
align-items: center;
padding: 10px 0;
border-bottom: 1px solid #eee;
}
.result-row:last-child {
border-bottom: none;
}
.result-label {
color: #666;
font-weight: 500;
}
.result-value {
font-weight: 700;
color: #2c3e50;
font-size: 18px;
}
.main-result {
background-color: #e8f6f3;
border: 1px solid #a9dfbf;
padding: 15px;
border-radius: 5px;
margin-top: 10px;
text-align: center;
}
.main-result .result-label {
color: #145a32;
font-size: 16px;
display: block;
margin-bottom: 5px;
}
.main-result .result-value {
color: #1e8449;
font-size: 32px;
}
.error-msg {
color: #e74c3c;
text-align: center;
margin-bottom: 15px;
font-weight: 600;
display: none;
}
.content-section {
margin-top: 50px;
line-height: 1.6;
color: #333;
}
.content-section h2 {
color: #2c3e50;
border-bottom: 2px solid #ecf0f1;
padding-bottom: 10px;
margin-top: 30px;
}
.content-section h3 {
color: #34495e;
margin-top: 25px;
}
.content-section p {
margin-bottom: 15px;
}
.content-section ul {
margin-bottom: 15px;
padding-left: 20px;
}
.content-section li {
margin-bottom: 8px;
}
function calculateCapRate() {
// Get input values
var price = parseFloat(document.getElementById('propertyPrice').value);
var grossIncome = parseFloat(document.getElementById('grossIncome').value);
var expenses = parseFloat(document.getElementById('operatingExpenses').value);
var vacancyRate = parseFloat(document.getElementById('vacancyRate').value);
var errorDiv = document.getElementById('calcError');
var resultDiv = document.getElementById('result-container');
// Validation
if (isNaN(price) || isNaN(grossIncome) || isNaN(expenses) || isNaN(vacancyRate) || price <= 0) {
errorDiv.style.display = 'block';
resultDiv.style.display = 'none';
return;
} else {
errorDiv.style.display = 'none';
}
// Calculations
// 1. Calculate Vacancy Loss
var vacancyLoss = grossIncome * (vacancyRate / 100);
// 2. Effective Gross Income
var effectiveIncome = grossIncome – vacancyLoss;
// 3. Net Operating Income (NOI)
// NOI = Effective Gross Income – Operating Expenses
var noi = effectiveIncome – expenses;
// 4. Cap Rate
// Cap Rate = (NOI / Property Value) * 100
var capRate = (noi / price) * 100;
// Formatting currency
var currencyFormatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 0,
maximumFractionDigits: 0,
});
// Display Results
document.getElementById('displayGross').innerText = currencyFormatter.format(grossIncome);
document.getElementById('displayVacancy').innerText = "-" + currencyFormatter.format(vacancyLoss);
document.getElementById('displayEffective').innerText = currencyFormatter.format(effectiveIncome);
document.getElementById('displayExpenses').innerText = "-" + currencyFormatter.format(expenses);
document.getElementById('displayNOI').innerText = currencyFormatter.format(noi);
// Display Cap Rate with 2 decimal places
document.getElementById('displayCapRate').innerText = capRate.toFixed(2) + "%";
// Show container
resultDiv.style.display = 'block';
}
Cap Rate Calculator
Calculate the Capitalization Rate for your real estate investments.
Please enter valid positive numbers for all fields.
Gross Potential Income:
Vacancy Loss:
Effective Gross Income:
Total Operating Expenses:
Net Operating Income (NOI):
Capitalization Rate (Cap Rate)
Understanding Capitalization Rate (Cap Rate)
The Capitalization Rate, or "Cap Rate," is one of the most fundamental metrics used in real estate investing to evaluate the profitability and return potential of an investment property. It represents the ratio of the property's Net Operating Income (NOI) to its current market value or purchase price.
How is Cap Rate Calculated?
The formula for Cap Rate is relatively simple, yet it requires accurate financial data to be effective:
Cap Rate = (Net Operating Income / Property Value) × 100%
To use our calculator effectively, you need to understand the components:
- Property Price: The total cost to acquire the property.
- Gross Income: The total rental income the property would generate if 100% occupied.
- Vacancy Rate: An estimated percentage of time the property will sit empty (usually 5-10%).
- Operating Expenses: Ongoing costs to run the property, including property management fees, taxes, insurance, maintenance, and utilities. Note that mortgage payments are NOT included in operating expenses for Cap Rate calculations.
- Net Operating Income (NOI): The actual profit generated by the property after expenses but before debt service.
What is a "Good" Cap Rate?
There is no single "good" Cap Rate that applies to every investor or market. However, generally speaking:
- 4% to 5%: Often associated with lower-risk properties in high-demand, Class A areas (e.g., downtown New York or San Francisco).
- 6% to 8%: Considered a balanced return for moderate-risk properties in stable suburban areas.
- 8% to 12%+: Higher returns usually associated with higher risk, older buildings, or properties in declining neighborhoods (Class C or D).
Why Use a Cap Rate Calculator?
Using this Cap Rate Calculator allows investors to quickly compare different properties on an apples-to-apples basis, regardless of how they are financed. Since Cap Rate excludes mortgage debt, it measures the natural return of the property itself. This makes it an essential tool for:
- Initial screening of potential investment properties.
- Comparing the relative value of properties in different markets.
- Determining the market value of a property based on its income generation (Income Approach to Valuation).
Example Calculation
Imagine you are looking at a duplex listed for $400,000. It generates $48,000 in gross annual rent.
If you estimate a 5% vacancy rate ($2,400) and $12,000 in annual operating expenses (taxes, insurance, repairs), your math looks like this:
- Effective Gross Income: $48,000 – $2,400 = $45,600
- Net Operating Income (NOI): $45,600 – $12,000 = $33,600
- Cap Rate: ($33,600 / $400,000) = 8.4%
This 8.4% return indicates a potentially strong cash-flow property, assuming the location and building condition align with your investment goals.