Cap Rate & Cash-on-Cash Return Calculator
Calculate and compare investment property returns using cap rate and cash-on-cash analysis. Make smarter investment decisions with accurate return metrics.
Cap Rate Calculation
Calculate capitalization rate using NOI and property value for instant valuation analysis.
Cash-on-Cash Return
Determine your annual return on invested capital for any rental property.
NOI Analysis
Calculate Net Operating Income with detailed expense breakdowns.
Property Comparison
Compare multiple properties using consistent return metrics.
Market Benchmarking
Compare your results against typical market cap rates and returns.
Instant Calculations
Get both cap rate and cash-on-cash results instantly for quick analysis.
Understanding Cap Rate for Real Estate Investors
Cap Rate (Capitalization Rate) is a key metric for evaluating investment property value. It's calculated as: Cap Rate = Net Operating Income ÷ Property Value × 100. Cap rates help investors compare properties regardless of financing and assess market valuations.
Lower cap rates indicate higher prices relative to income (often found in premium markets), while higher cap rates suggest better income relative to price (often found in emerging markets or riskier properties).
Cash-on-Cash Return Explained
Cash-on-cash return measures the annual return on your actual cash invested, making it more relevant for leveraged investments. Formula: Annual Cash Flow ÷ Total Cash Invested × 100.
Unlike cap rate, cash-on-cash accounts for financing and shows the return on YOUR money, not the property's overall return. This helps compare investments with different financing structures.
Frequently Asked Questions
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