Cap Rate Calculator
Cap rate (capitalization rate) is a property's net operating income divided by its price — the quickest read on unleveraged yield. It's how investors compare deals across markets, but it only tells you the going-in yield: it ignores financing, upside, and risk. Use it to screen, not to decide.
Cap rate
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Rule of thumb: 5–7% is typical in most US markets; higher = more yield (often more risk), lower = appreciation-leaning or pricier markets.
FAQ
What is a good cap rate?
It depends on the market and asset, but 5–7% is a common range. Higher-yield (7%+) markets often carry more risk; coastal/appreciation markets run lower (4–5%). The right benchmark is the local comparable set, which is what PropHunt's analysis pulls for each deal.
Does cap rate include the mortgage?
No. Cap rate is unleveraged — it uses NOI, before debt service. To factor in your loan, use cash-on-cash return and DSCR.