Cap Rate Calculator

Cap rates typically range from 4-10% - lower rates indicate stable markets, higher rates suggest higher risk or growth potential

Prime properties in major cities often have cap rates of 3-5%, while emerging markets may offer 8-12% returns

Cap rate doesn't account for mortgage financing - use it to evaluate property performance independent of your financing structure

A 'good' cap rate depends on property type, location, and market conditions - always compare to similar properties in the area

Operating expenses typically range from 35-50% of gross income - significantly lower or higher percentages warrant investigation

Cap rate is a snapshot in time - consider potential for income growth and property appreciation for long-term investment value

Vacancy rates vary by market and property type - research local averages to ensure accurate calculations

Cap rate inversely relates to property value - as property values increase, cap rates typically decrease

Don't rely solely on cap rate - analyze cash flow, appreciation potential, tax benefits, and overall investment goals

Market cap rates change over time - compare your property's cap rate to current market rates to assess relative value