About this tool
Cap rate is annual NOI as a percentage of property value — the unlevered yield on a rental investment.
Formula
CapRate = NOI / propertyValue × 100
Worked example
$24,000 NOI on a $400,000 property → 6.0 % cap rate.
Notes
NOI excludes mortgage payments. Compare cap rates within similar markets — 4–8 % is typical for residential rentals in 2025.