.cap-rate-calculator-container {
font-family: 'Segoe UI', Tahoma, Geneva, Verdana, sans-serif;
max-width: 800px;
margin: 0 auto;
background: #ffffff;
padding: 20px;
border-radius: 8px;
box-shadow: 0 4px 15px rgba(0,0,0,0.05);
}
.crc-calculator-box {
background: #f8f9fa;
padding: 25px;
border-radius: 8px;
border: 1px solid #e9ecef;
margin-bottom: 40px;
}
.crc-title {
text-align: center;
color: #2c3e50;
margin-bottom: 25px;
font-size: 24px;
font-weight: 700;
}
.crc-input-group {
margin-bottom: 20px;
}
.crc-label {
display: block;
margin-bottom: 8px;
color: #495057;
font-weight: 600;
}
.crc-input {
width: 100%;
padding: 12px;
border: 1px solid #ced4da;
border-radius: 4px;
font-size: 16px;
box-sizing: border-box;
transition: border-color 0.15s ease-in-out;
}
.crc-input:focus {
border-color: #007bff;
outline: 0;
box-shadow: 0 0 0 0.2rem rgba(0,123,255,.25);
}
.crc-btn {
display: block;
width: 100%;
background-color: #007bff;
color: #fff;
padding: 14px;
border: none;
border-radius: 4px;
font-size: 18px;
font-weight: 600;
cursor: pointer;
transition: background-color 0.2s;
}
.crc-btn:hover {
background-color: #0056b3;
}
.crc-result-box {
margin-top: 25px;
padding: 20px;
background-color: #d4edda;
border: 1px solid #c3e6cb;
border-radius: 4px;
display: none;
}
.crc-result-item {
display: flex;
justify-content: space-between;
align-items: center;
margin-bottom: 10px;
padding-bottom: 10px;
border-bottom: 1px solid rgba(0,0,0,0.05);
}
.crc-result-item:last-child {
border-bottom: none;
margin-bottom: 0;
padding-bottom: 0;
}
.crc-result-label {
color: #155724;
font-weight: 600;
}
.crc-result-value {
color: #155724;
font-weight: 800;
font-size: 20px;
}
.crc-error {
color: #dc3545;
text-align: center;
margin-top: 10px;
display: none;
}
.crc-content h2 {
color: #2c3e50;
margin-top: 30px;
border-bottom: 2px solid #007bff;
padding-bottom: 10px;
}
.crc-content h3 {
color: #343a40;
margin-top: 25px;
}
.crc-content p {
line-height: 1.6;
color: #555;
margin-bottom: 15px;
}
.crc-content ul {
margin-bottom: 20px;
padding-left: 20px;
}
.crc-content li {
margin-bottom: 8px;
color: #555;
line-height: 1.6;
}
.crc-formula-box {
background: #f8f9fa;
padding: 15px;
border-left: 4px solid #007bff;
font-family: monospace;
margin: 20px 0;
}
function calculateCapRate() {
var valProperty = document.getElementById('propertyValue').value;
var valRent = document.getElementById('monthlyRent').value;
var valExpenses = document.getElementById('annualExpenses').value;
var resultBox = document.getElementById('crcResult');
var errorBox = document.getElementById('crcError');
// Reset display
resultBox.style.display = 'none';
errorBox.style.display = 'none';
// Validation
if (valProperty === " || valRent === " || valExpenses === ") {
errorBox.style.display = 'block';
return;
}
var propertyValue = parseFloat(valProperty);
var monthlyRent = parseFloat(valRent);
var annualExpenses = parseFloat(valExpenses);
if (isNaN(propertyValue) || isNaN(monthlyRent) || isNaN(annualExpenses) || propertyValue <= 0) {
errorBox.innerHTML = "Please enter valid positive numbers. Property value must be greater than zero.";
errorBox.style.display = 'block';
return;
}
// Calculations
var annualGrossIncome = monthlyRent * 12;
var netOperatingIncome = annualGrossIncome – annualExpenses;
var capRate = (netOperatingIncome / propertyValue) * 100;
// Update DOM
document.getElementById('displayGrossIncome').innerText = '$' + annualGrossIncome.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('displayNOI').innerText = '$' + netOperatingIncome.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('displayCapRate').innerText = capRate.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + '%';
// Show result
resultBox.style.display = 'block';
}
Real Estate Cap Rate Calculator
Please enter valid numeric values for all fields.
Gross Annual Income:
$0.00
Net Operating Income (NOI):
$0.00
Capitalization Rate:
0.00%
What is Capitalization Rate (Cap Rate)?
The Capitalization Rate, commonly referred to as the Cap Rate, is a fundamental metric in real estate investing used to estimate the potential return on an investment property. It indicates the rate of return that is expected to be generated on a real estate investment property.
Unlike other metrics that might factor in mortgage financing, the Cap Rate measures the property's natural ability to generate income based purely on its purchase price or current market value. This allows investors to compare properties effectively regardless of how they are financed.
The Cap Rate Formula
The calculation is relatively straightforward but relies on accurate data. The formula is:
Cap Rate = (Net Operating Income / Current Market Value) × 100
Where:
- Net Operating Income (NOI): This is the annual income generated by the property (rent) minus all necessary operating expenses (taxes, insurance, management fees, maintenance). It does not include mortgage payments.
- Current Market Value: The present value of the property or the purchase price.
Real-World Example
Let's say you are looking at a duplex listed for $500,000.
The property generates $4,500 per month in rent. However, you have annual expenses totaling $12,000 (including property taxes, insurance, and a maintenance reserve).
- First, calculate Annual Gross Income: $4,500 × 12 = $54,000.
- Next, calculate NOI: $54,000 – $12,000 = $42,000.
- Finally, divide by the Property Value: $42,000 / $500,000 = 0.084.
Expressing this as a percentage gives you an 8.4% Cap Rate.
What is a Good Cap Rate?
There is no single "good" Cap Rate, as it varies heavily by location and asset class. Generally:
- 4% – 5%: Common in high-demand, low-risk areas (like downtown NYC or San Francisco). Values are high, but risks are low.
- 6% – 8%: Often considered a healthy balance for residential rental properties in stable suburban markets.
- 8% – 10%+: Higher returns usually associated with higher risk, older properties, or areas with lower potential for appreciation.
Use this calculator to quickly assess whether a property meets your investment criteria before diving deeper into the financial details.