.cap-rate-calculator-wrapper {
font-family: -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif;
max-width: 800px;
margin: 0 auto;
padding: 20px;
color: #333;
line-height: 1.6;
}
.calc-container {
background-color: #f9f9f9;
border: 1px solid #e0e0e0;
border-radius: 8px;
padding: 30px;
margin-bottom: 40px;
box-shadow: 0 4px 6px rgba(0,0,0,0.05);
}
.calc-title {
text-align: center;
color: #2c3e50;
margin-bottom: 25px;
font-size: 24px;
font-weight: 700;
}
.calc-grid {
display: grid;
grid-template-columns: 1fr 1fr;
gap: 20px;
}
@media (max-width: 600px) {
.calc-grid {
grid-template-columns: 1fr;
}
}
.input-group {
margin-bottom: 15px;
}
.input-group label {
display: block;
margin-bottom: 8px;
font-weight: 600;
font-size: 14px;
color: #555;
}
.input-group input {
width: 100%;
padding: 12px;
border: 1px solid #ccc;
border-radius: 4px;
font-size: 16px;
box-sizing: border-box;
transition: border-color 0.3s;
}
.input-group input:focus {
border-color: #3498db;
outline: none;
}
.full-width {
grid-column: 1 / -1;
}
.calc-btn {
background-color: #27ae60;
color: white;
border: none;
padding: 15px 30px;
font-size: 18px;
font-weight: bold;
border-radius: 4px;
cursor: pointer;
width: 100%;
margin-top: 10px;
transition: background-color 0.3s;
}
.calc-btn:hover {
background-color: #219150;
}
.result-box {
background-color: #fff;
border: 2px solid #3498db;
border-radius: 6px;
padding: 20px;
margin-top: 30px;
text-align: center;
display: none;
}
.result-metric {
margin-bottom: 15px;
border-bottom: 1px solid #eee;
padding-bottom: 10px;
}
.result-metric:last-child {
border-bottom: none;
margin-bottom: 0;
padding-bottom: 0;
}
.metric-label {
font-size: 14px;
color: #7f8c8d;
text-transform: uppercase;
letter-spacing: 1px;
}
.metric-value {
font-size: 28px;
color: #2c3e50;
font-weight: 800;
margin-top: 5px;
}
.cap-rate-value {
color: #27ae60;
font-size: 36px;
}
.seo-content h2 {
color: #2c3e50;
border-bottom: 2px solid #3498db;
padding-bottom: 10px;
margin-top: 40px;
}
.seo-content h3 {
color: #34495e;
margin-top: 25px;
}
.seo-content p, .seo-content ul {
margin-bottom: 15px;
font-size: 17px;
}
.seo-content ul {
padding-left: 20px;
}
.seo-content li {
margin-bottom: 8px;
}
function calculateCapRate() {
// Get inputs using var
var price = parseFloat(document.getElementById('propertyPrice').value);
var rent = parseFloat(document.getElementById('monthlyRent').value);
var vacancy = parseFloat(document.getElementById('vacancyRate').value);
var taxes = parseFloat(document.getElementById('annualTaxes').value);
var insurance = parseFloat(document.getElementById('annualInsurance').value);
var maintenance = parseFloat(document.getElementById('annualMaintenance').value);
var management = parseFloat(document.getElementById('propManagement').value);
// Validation
if (isNaN(price) || price <= 0) {
alert("Please enter a valid Purchase Price.");
return;
}
if (isNaN(rent)) rent = 0;
if (isNaN(vacancy)) vacancy = 0;
if (isNaN(taxes)) taxes = 0;
if (isNaN(insurance)) insurance = 0;
if (isNaN(maintenance)) maintenance = 0;
if (isNaN(management)) management = 0;
// Calculations
var annualGrossIncome = rent * 12;
var vacancyLoss = annualGrossIncome * (vacancy / 100);
var effectiveGrossIncome = annualGrossIncome – vacancyLoss;
var totalExpenses = taxes + insurance + maintenance + management;
var noi = effectiveGrossIncome – totalExpenses;
var capRate = (noi / price) * 100;
// Display Results
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
});
document.getElementById('displayGrossIncome').innerHTML = formatter.format(annualGrossIncome);
document.getElementById('displayExpenses').innerHTML = formatter.format(totalExpenses);
document.getElementById('displayNOI').innerHTML = formatter.format(noi);
// Handle negative NOI or weird edge cases
if (capRate < -100) {
document.getElementById('displayCapRate').innerHTML = "N/A";
} else {
document.getElementById('displayCapRate').innerHTML = capRate.toFixed(2) + "%";
}
document.getElementById('result').style.display = "block";
}
What is Cap Rate and Why Does it Matter?
The Capitalization Rate, or Cap Rate, is one of the most fundamental metrics used by real estate investors to evaluate the profitability of an investment property. Unlike a simple mortgage calculator, a Cap Rate calculator determines the potential rate of return on a real estate investment based on the income the property is expected to generate.
This metric allows investors to compare different properties on an apples-to-apples basis, regardless of how they are financed. It focuses purely on the property's intrinsic ability to generate revenue relative to its purchase price.
How to Calculate Cap Rate
The formula for Capitalization Rate is relatively straightforward but requires accurate inputs to be effective. The formula is:
Cap Rate = Net Operating Income (NOI) / Current Market Value (Purchase Price)
To use this calculator effectively, you need to understand the components:
- Gross Rental Income: The total income expected from the property if fully rented for the year.
- Vacancy Rate: A percentage deduction to account for times when the unit sits empty. A standard conservative estimate is 5-8%.
- Net Operating Income (NOI): This is your effective income minus all operating expenses (Taxes, Insurance, Maintenance, Management Fees). Note that NOI does not include mortgage payments.
What is a "Good" Cap Rate?
There is no single answer to what constitutes a "good" cap rate, as it varies heavily by location, asset class, and current interest rates. However, general guidelines suggest:
- 4% – 6%: Considered a "safe" investment, typically found in high-demand urban areas with low risk and high property appreciation potential.
- 6% – 8%: A balanced return often sought by average investors in suburban markets.
- 8% – 12%+: High-yield investments, often found in riskier neighborhoods or rural areas where property appreciation is slower, but cash flow is higher.
Difference Between Cap Rate and Cash-on-Cash Return
It is crucial not to confuse Cap Rate with Cash-on-Cash Return. Cap Rate assumes you bought the property entirely with cash (no loan). Cash-on-Cash return factors in your mortgage and down payment to show the return on the actual cash you invested. Use the Cap Rate to screen properties, and Cash-on-Cash return to make final financing decisions.