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Free Tool
Cap Rate Calculator
Calculate going-in and stabilized cap rates for commercial real estate deals. Add market context to see how your deal compares.
Inputs
Going-In Cap Rate
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Enter NOI and purchase price to calculate
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Frequently asked questions
Cap rate definitions, formulas, and interpretation
A cap rate, or capitalization rate, is the ratio of net operating income (NOI) to purchase price. It measures unlevered yield: what the property returns in cash flow before debt service. A 5% cap rate means the property generates $5 of NOI for every $100 of purchase price. It is a snapshot, not a total return, because it excludes debt, taxes, and appreciation.