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Cap Rate Calculator
Inputs
Type whole dollars. Commas and symbols are ignored.
Cap rate
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Enter both numbers to see the result.
Rule of thumb: 5–7% is typical in most US markets; higher = more yield (often more risk), lower = appreciation-leaning or pricier markets.
What it measures
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.
Questions
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.
One number screens a deal. The full analysis underwrites it.
10 specialist reads, a 10,000-path Monte Carlo and a pencil price: the most you can pay and still clear the lender's DSCR floor. 2-3 minutes and under $3 a building.
- specialist reads per deal
- 10
- Monte Carlo paths
- 10,000
- per full analysis
- 2-3 min
- a building, any plan
- <$3