Rsu Tax Calculator

Commercial Real Estate Cap Rate Calculator

(Taxes, Insurance, Utilities, Repairs, Management)

Investment Results

Annual Gross Income:

$0

Net Operating Income (NOI):

$0

Capitalization Rate (Cap Rate):

0.00%

What is a Cap Rate in Commercial Real Estate?

The Capitalization Rate (or Cap Rate) is a fundamental metric used in commercial real estate to indicate the rate of return that is expected to be generated on a real estate investment property. This measure is computed based on the net income which the property is expected to generate and is calculated by dividing net operating income (NOI) by property asset value.

How the Calculation Works

This calculator performs a multi-step analysis to ensure accuracy:

1. Annual Gross Revenue: Multiplies your monthly rent by 12.
2. Adjusted Gross Income: Subtracts the projected vacancy loss from the gross revenue.
3. Net Operating Income (NOI): Subtracts annual operating expenses (maintenance, taxes, insurance) from the adjusted gross income.
4. Cap Rate: Divides the NOI by the current market value or purchase price.

Example Calculation

If you purchase a small office building for $1,000,000 that generates $10,000 in monthly rent with a 5% vacancy rate and $30,000 in annual expenses:

• Gross Annual Income: $120,000
• Vacancy Loss: $6,000
• Effective Income: $114,000
• NOI: $114,000 – $30,000 = $84,000
• Cap Rate: $84,000 / $1,000,000 = 8.4%

Typically, a "good" cap rate depends on the asset class and location. Primary markets (like NYC or London) often have lower cap rates (4-5%) due to lower risk, while secondary or tertiary markets may offer higher cap rates (7-10%) to compensate for higher risk or lower appreciation potential.

function calculateCapRate() { var price = parseFloat(document.getElementById('purchasePrice').value); var monthlyRent = parseFloat(document.getElementById('monthlyRent').value); var vacancyRate = parseFloat(document.getElementById('vacancyRate').value); var expenses = parseFloat(document.getElementById('annualExpenses').value); if (isNaN(price) || isNaN(monthlyRent) || isNaN(vacancyRate) || isNaN(expenses) || price <= 0) { alert("Please enter valid positive numbers for all fields."); return; } // Calculation Logic var annualGross = monthlyRent * 12; var vacancyLoss = annualGross * (vacancyRate / 100); var effectiveGrossIncome = annualGross – vacancyLoss; var noi = effectiveGrossIncome – expenses; var capRate = (noi / price) * 100; // Display Results document.getElementById('resGross').innerHTML = '$' + annualGross.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); document.getElementById('resNOI').innerHTML = '$' + noi.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); document.getElementById('resCapRate').innerHTML = capRate.toFixed(2) + '%'; document.getElementById('resultsArea').style.display = 'block'; // Scroll to results document.getElementById('resultsArea').scrollIntoView({behavior: 'smooth', block: 'nearest'}); }