Add the numbers for your scenario.
01Real Estate toolCalculated result
Cap Rate Calculator
Capitalisation rate from income and property value.
100% FreeRuns instantlyNo watermark
- 1Enter detailsAdd the numbers for your scenario.
- 2CalculateVootkit updates the result instantly.
- 3ReviewCheck totals, notes and breakdowns.
Private by designProcessed on your device where possible.
Works on any deviceDesktop, tablet and mobile browsers.
No installationOpen the page and start working.
Always free coreUse the free plan for everyday tasks.
How to use Cap Rate Calculator
Vootkit updates the result instantly.
02Check totals, notes and breakdowns.
03Copy the answer into your workflow.
04Your files stay private
Your work is processed locally in your browser where possible and is never added to a Vootkit upload library.
Learn more about privacyCapitalisation rate is how commercial property is compared, because it strips out how the buyer financed the deal. Two investors paying the same price for the same building get the same cap rate even if one paid cash and the other borrowed everything.
What Cap Rate Calculator does
Divides net operating income by property value. NOI is rental income minus operating expenses, and explicitly excludes mortgage payments — that exclusion is what makes cap rates comparable across deals.
Defaults to a 300,000 property at 2,200 a month.
What goes in
| Formula | Net operating income ÷ property value |
|---|---|
| NOI includes | Rent minus operating expenses |
| <strong>NOI excludes</strong> | <strong>Mortgage payments — deliberately</strong> |
| Why exclude financing | So deals are comparable regardless of leverage |
| Higher cap rate | Higher return, usually higher risk |
| Lower cap rate | Lower return, usually prime location |
| Compare against | Other properties in the same market |
| Is this advice? | <strong>No</strong> |
Detailed steps
- Enter the property value and rent.
- Subtract operating expenses — but not the mortgage.
- Compare the result against similar properties in the same market, not a national average.
Worth knowing
A high cap rate is not a bargain, it is a price. Markets price risk into cap rates, so a building yielding 9% where comparable stock yields 5% is usually signalling something — a weak location, a short lease, a difficult tenant or deferred maintenance. The question to ask is what the market knows that makes it cheap.
Frequently Asked Questions
Why does cap rate ignore the mortgage?
Because it describes the property, not the buyer. Two people can finance the same building completely differently; excluding debt lets them compare the asset on equal terms. Cash-on-Cash is the metric that does account for leverage.
Is a higher cap rate better?
It is a higher return and usually a higher risk. Prime, low-risk property in strong locations trades at low cap rates precisely because buyers accept less return for more security. Comparing a high cap rate against a low one without asking why is how people buy problems.
What is a normal cap rate?
It varies enormously by market, property type and interest rates, so a national figure is not much use. Compare against genuinely similar properties in the same area at the same time.
Should I buy based on cap rate?
This calculates a metric; it cannot assess a deal. Cap rate ignores growth prospects, condition, lease terms and your own tax position. Property decisions of this size warrant professional advice.
Is Cap Rate Calculator free?
Yes. The Vootkit free plan includes 5 tool runs a day. Upgrade to Vootkit Pro for unlimited daily use, an ad-free workspace and saved workflows.
Are my files uploaded?
No. Cap Rate Calculator runs entirely in your browser — your file is processed on your own device and never sent to a server. There is nothing for us to store or delete.
Do I need to install anything?
No. Cap Rate Calculator works in any modern browser on desktop, tablet or phone. Open the page and start.
How often can I use it? Is there a daily limit?
On the free plan you get 5 tool runs a day. When you reach the limit you'll see a prompt to upgrade, and it resets the next day. Vootkit Pro removes the cap entirely for unlimited daily use.
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This tool processes everything locally in your browser. You can disconnect from the internet after the page loads and it will still work.