Cap rate and rental yield calculator
Cap rate is net operating income divided by the purchase price. A $300,000 rental earning $2,200 a month, with 5% vacancy, $3,600 property tax, $1,500 insurance and 8% each for maintenance and management, has a NOI of $15,967 and a cap rate of 5.32%. Its gross yield is 8.8%.
- ✅ Free
- 🔒 No sign-up
- 📱 Works on mobile
- ⚡ Instant results
Estimate only, not financial advice. Cap rate ignores financing and income taxes, and real expenses vary by property.
🔒 Everything runs in your browser. Your data and files never leave your device.
Cap rate, NOI and gross yield
NOI = rent collected − operating expenses cap rate = NOI ÷ purchase price × 100 gross yield = annual rent ÷ purchase price × 100 GRM = purchase price ÷ annual rent
NOI (net operating income) counts rent after vacancy minus property tax, insurance, HOA, maintenance and management. It leaves out mortgage payments, depreciation and income taxes, so cap rate compares properties as if each were bought with cash.
What a good cap rate looks like
| Cap rate | Typical meaning |
|---|---|
| 3% to 5% | Lower risk, stronger markets, appreciation focus |
| 5% to 8% | Balanced income and risk, common target for single-family rentals |
| 8% and up | Higher income, often higher risk or older properties |
Compare cap rates only between similar properties in the same market. A cap rate below your mortgage rate means the property will likely cost you cash each month.
3 real-life examples
$300,000 house renting for $2,200
Annual rent $26,400, vacancy $1,320, collected $25,080. Expenses: $3,600 tax, $1,500 insurance, $2,006 maintenance, $2,006 management = $9,113. NOI $15,967. Cap rate 5.32%, gross yield 8.80%, GRM 11.4.
$250,000 condo, $1,800 rent, no vacancy
Annual rent $21,600. Expenses: $2,800 tax, $1,200 insurance, $1,200 HOA, 5% maintenance ($1,080), 10% management \( (\$2{,}160) = \$8{,}440 \). NOI $13,160, cap rate 5.26%, GRM 11.6.
$400,000 duplex, $3,000 rent, self-managed
Annual rent $36,000, 8% vacancy leaves $33,120. Expenses: $5,000 tax, $1,800 insurance, 10% maintenance \( (\$3{,}312) = \$10{,}112 \). NOI $23,008, cap rate 5.75%.