:root {
–primary-color: #2c3e50;
–accent-color: #27ae60;
–bg-color: #f4f7f6;
–text-color: #333;
–border-radius: 8px;
}
body {
font-family: -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif;
line-height: 1.6;
color: var(–text-color);
margin: 0;
padding: 20px;
background-color: #fff;
}
.calculator-wrapper {
max-width: 800px;
margin: 0 auto;
background: #fff;
border: 1px solid #e0e0e0;
border-radius: var(–border-radius);
box-shadow: 0 4px 6px rgba(0,0,0,0.05);
overflow: hidden;
}
.calc-header {
background-color: var(–primary-color);
color: #fff;
padding: 20px;
text-align: center;
}
.calc-header h2 {
margin: 0;
font-size: 1.5rem;
}
.calc-body {
display: flex;
flex-wrap: wrap;
padding: 20px;
gap: 20px;
}
.input-section {
flex: 1;
min-width: 300px;
}
.result-section {
flex: 1;
min-width: 300px;
background-color: var(–bg-color);
padding: 20px;
border-radius: var(–border-radius);
display: flex;
flex-direction: column;
justify-content: center;
}
.form-group {
margin-bottom: 15px;
}
.form-group label {
display: block;
margin-bottom: 5px;
font-weight: 600;
font-size: 0.9rem;
}
.input-wrapper {
position: relative;
}
.input-wrapper span {
position: absolute;
left: 10px;
top: 50%;
transform: translateY(-50%);
color: #777;
}
.form-group input {
width: 100%;
padding: 10px 10px 10px 25px;
border: 1px solid #ccc;
border-radius: 4px;
font-size: 1rem;
box-sizing: border-box;
}
button.calc-btn {
width: 100%;
padding: 12px;
background-color: var(–accent-color);
color: white;
border: none;
border-radius: 4px;
font-size: 1rem;
font-weight: bold;
cursor: pointer;
transition: background-color 0.3s;
margin-top: 10px;
}
button.calc-btn:hover {
background-color: #219150;
}
.result-box {
text-align: center;
margin-bottom: 15px;
padding-bottom: 15px;
border-bottom: 1px solid #ddd;
}
.result-box:last-child {
border-bottom: none;
}
.result-label {
font-size: 0.9rem;
color: #666;
margin-bottom: 5px;
}
.result-value {
font-size: 1.8rem;
font-weight: 800;
color: var(–primary-color);
}
.result-value.highlight {
color: var(–accent-color);
}
.article-content {
max-width: 800px;
margin: 40px auto;
padding: 0 20px;
}
.article-content h2 {
color: var(–primary-color);
border-bottom: 2px solid var(–accent-color);
padding-bottom: 10px;
margin-top: 30px;
}
.article-content h3 {
color: var(–primary-color);
margin-top: 25px;
}
.article-content ul {
background: var(–bg-color);
padding: 20px 40px;
border-radius: var(–border-radius);
}
.article-content p {
margin-bottom: 15px;
}
@media (max-width: 600px) {
.calc-body {
flex-direction: column;
}
}
function calculateCapRate() {
// Get Input Values
var price = parseFloat(document.getElementById('propertyPrice').value);
var rent = parseFloat(document.getElementById('monthlyRent').value);
var taxes = parseFloat(document.getElementById('annualTaxes').value);
var insurance = parseFloat(document.getElementById('annualInsurance').value);
var maintenance = parseFloat(document.getElementById('annualMaintenance').value);
var mgmt = parseFloat(document.getElementById('mgmtFee').value);
// Validation: Ensure Purchase Price and Rent are provided
if (isNaN(price) || price <= 0) {
alert("Please enter a valid Property Purchase Price.");
return;
}
if (isNaN(rent) || rent <= 0) {
alert("Please enter a valid Monthly Rental Income.");
return;
}
// Handle empty optional fields as 0
if (isNaN(taxes)) taxes = 0;
if (isNaN(insurance)) insurance = 0;
if (isNaN(maintenance)) maintenance = 0;
if (isNaN(mgmt)) mgmt = 0;
// Perform Calculations
var grossAnnualIncome = rent * 12;
var totalAnnualExpenses = taxes + insurance + maintenance + mgmt;
var netOperatingIncome = grossAnnualIncome – totalAnnualExpenses;
var capRate = (netOperatingIncome / price) * 100;
// Format and Display Results
document.getElementById('resultGross').innerHTML = '$' + grossAnnualIncome.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById('resultExpenses').innerHTML = '$' + totalAnnualExpenses.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById('resultNOI').innerHTML = '$' + netOperatingIncome.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
// Color coding for Cap Rate based on general investment standards
var capRateElement = document.getElementById('resultCapRate');
capRateElement.innerHTML = capRate.toFixed(2) + '%';
if(capRate = 4 && capRate < 8) {
capRateElement.style.color = '#f39c12'; // Orange/Yellow for average
} else {
capRateElement.style.color = '#27ae60'; // Green for good return
}
}
Understanding the Capitalization Rate (Cap Rate)
For real estate investors, quickly evaluating the potential profitability of an investment property is crucial. The Capitalization Rate, or "Cap Rate," is one of the most popular metrics used to compare different real estate investment opportunities. Our free Cap Rate Calculator helps you instantly determine the potential return on a property based on its income and expenses.
What is Cap Rate?
The Capitalization Rate is a fundamental concept in the commercial and residential real estate sectors. It represents the rate of return on a real estate investment property based on the income that the property is expected to generate. Unlike ROI (Return on Investment), Cap Rate ignores mortgage financing, focusing purely on the property's natural ability to generate income relative to its purchase price.
Essentially, the Cap Rate answers the question: "If I bought this property with all cash, what percentage of my investment would I get back in profit every year?"
The Cap Rate Formula
The math behind the Cap Rate is straightforward but requires accurate data. The formula is:
Cap Rate = Net Operating Income (NOI) / Current Market Value (Purchase Price)
Step 1: Calculate Gross Annual Income
Multiply the monthly rent by 12. Also include any other income sources, such as coin-operated laundry or parking fees.
Step 2: Calculate Net Operating Income (NOI)
Take your Gross Annual Income and subtract all operating expenses. Operating expenses include:
- Property Taxes
- Insurance Premiums
- Maintenance and Repairs (estimate 1% of property value or 10% of rent)
- Property Management Fees
- Utilities (if landlord paid)
- Vacancy Allowance (money set aside for when the unit is empty)
Note: Mortgage payments (principal and interest) are NOT included in operating expenses when calculating NOI.
Step 3: Divide by Purchase Price
Finally, divide the NOI by the purchase price of the property to get a decimal, then multiply by 100 to get the percentage.
What is a Good Cap Rate?
There is no single "good" Cap Rate, as it varies heavily by location and asset class. However, general guidelines suggest:
- 4% to 5%: Common in high-demand, low-risk areas (like Manhattan or San Francisco). Appreciation is usually the goal here rather than cash flow.
- 6% to 8%: Often considered a healthy balance between risk and return for residential rentals in stable suburban markets.
- 10% or higher: Typically found in riskier neighborhoods or rural areas where property values are lower, but management intensity might be higher.
Why Use a Cap Rate Calculator?
Using a calculator eliminates human error and allows you to "stress test" your investment. By adjusting the rental income or increasing the estimated maintenance costs in the calculator above, you can see how sensitive your return is to changes in the market. This helps you make data-driven decisions rather than emotional ones.