.crc-wrapper {
background: #ffffff;
padding: 30px;
border-radius: 8px;
box-shadow: 0 4px 15px rgba(0,0,0,0.05);
margin-bottom: 40px;
}
.crc-title {
text-align: center;
color: #2c3e50;
margin-bottom: 25px;
font-size: 24px;
font-weight: 700;
}
.crc-grid {
display: grid;
grid-template-columns: 1fr 1fr;
gap: 20px;
}
@media (max-width: 600px) {
.crc-grid { grid-template-columns: 1fr; }
}
.crc-input-group {
margin-bottom: 15px;
}
.crc-label {
display: block;
margin-bottom: 8px;
font-weight: 600;
color: #34495e;
font-size: 14px;
}
.crc-input {
width: 100%;
padding: 12px;
border: 1px solid #ddd;
border-radius: 4px;
font-size: 16px;
box-sizing: border-box;
transition: border-color 0.3s;
}
.crc-input:focus {
border-color: #27ae60;
outline: none;
}
.crc-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 0.3s;
margin-top: 10px;
}
.crc-btn:hover {
background-color: #219150;
}
.crc-result-box {
margin-top: 25px;
padding: 20px;
background-color: #f1f8f4;
border-left: 5px solid #27ae60;
display: none;
}
.crc-result-row {
display: flex;
justify-content: space-between;
margin-bottom: 10px;
font-size: 16px;
}
.crc-final-result {
font-size: 24px;
font-weight: 800;
color: #27ae60;
text-align: right;
}
.crc-content {
line-height: 1.6;
color: #444;
}
.crc-content h2 { color: #2c3e50; margin-top: 30px; }
.crc-content h3 { color: #27ae60; margin-top: 20px; }
.crc-content ul { padding-left: 20px; }
.crc-content li { margin-bottom: 8px; }
function calculateCapRate() {
// Get inputs
var price = parseFloat(document.getElementById('propertyPrice').value);
var monthlyRent = parseFloat(document.getElementById('monthlyRent').value);
var expenses = parseFloat(document.getElementById('annualExpenses').value);
var vacancy = parseFloat(document.getElementById('vacancyRate').value);
// Validation
if (isNaN(price) || price <= 0) {
alert("Please enter a valid Property Purchase Price.");
return;
}
if (isNaN(monthlyRent) || monthlyRent < 0) {
alert("Please enter valid Monthly Rental Income.");
return;
}
if (isNaN(expenses) || expenses < 0) {
expenses = 0; // Default to 0 if empty
}
if (isNaN(vacancy) || vacancy < 0) {
vacancy = 0;
}
// Calculations
var grossAnnualIncome = monthlyRent * 12;
var vacancyLoss = grossAnnualIncome * (vacancy / 100);
var adjustedGrossIncome = grossAnnualIncome – vacancyLoss;
var noi = adjustedGrossIncome – expenses;
var capRate = (noi / price) * 100;
// Display Logic
document.getElementById('resGrossIncome').innerText = "$" + grossAnnualIncome.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resAdjIncome').innerText = "$" + adjustedGrossIncome.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resNOI').innerText = "$" + noi.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resCapRate').innerText = capRate.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + "%";
// Show result box
document.getElementById('crcResult').style.display = "block";
}
What is a Capitalization Rate (Cap Rate)?
The Capitalization Rate, or "Cap Rate," is one of the most fundamental metrics in real estate investing. It measures the rate of return on a real estate investment property based on the income the property is expected to generate. This calculator helps investors quickly determine whether a property's asking price is justified by its income potential.
Unlike ROI (Return on Investment), which accounts for debt service (mortgage), Cap Rate assumes an all-cash purchase. This makes it an excellent tool for comparing the relative value of different properties regardless of how they are financed.
The Cap Rate Formula
The logic used in our calculator follows the standard industry formula:
Cap Rate = (Net Operating Income / Current Market Value) × 100
Where Net Operating Income (NOI) is calculated as:
- Gross Annual Income: (Monthly Rent × 12)
- Minus Vacancy Factor: Income lost due to empty units.
- Minus Operating Expenses: Property taxes, insurance, management fees, maintenance, and utilities.
Real-World Example
Imagine you are looking at a duplex listed for $500,000. Here is how the numbers might look:
- Rental Income: The property generates $4,500 per month ($54,000 annually).
- Vacancy: You estimate a 5% vacancy rate ($2,700 loss).
- Expenses: Taxes, insurance, and repairs cost $12,000 per year.
Step 1: Calculate NOI
$54,000 (Gross) – $2,700 (Vacancy) – $12,000 (Expenses) = $39,300 NOI.
Step 2: Calculate Cap Rate
($39,300 ÷ $500,000) × 100 = 7.86%.
This means for every dollar invested in the property (cash), you are earning a 7.86% annual return before financing costs.
What is a "Good" Cap Rate?
There is no single "correct" Cap Rate, as it varies heavily by location and asset class. However, general guidelines include:
- 4% – 5%: Common in high-demand "Class A" areas (e.g., downtown NYC or SF). These are low risk but offer lower immediate returns.
- 6% – 8%: A typical target for many residential investors in stable suburban markets.
- 8% – 12%+: Often found in riskier areas or rural markets where property appreciation is less likely, requiring higher cash flow to justify the investment.
Why Use This Calculator?
Using this Real Estate Cap Rate Calculator allows you to filter out bad deals instantly. If a seller is asking $1,000,000 for a property that only nets $30,000 a year (a 3% Cap Rate), and the market average is 7%, you know immediately that the property is overpriced or underperforming.