Enter the properties net operating income ($) and the property value ($) into the Cap Rate Calculator. The calculator will evaluate the Cap Rate.

## Cap Rate Formula

The following two example problems outline the steps and information needed to calculate the Cap Rate.

CR = NOI / MV

• Where CR is the Cap Rate ( )
• NOI is the properties net operating income ($) • MV is the property value ($)

## How to Calculate Cap Rate?

The following example problems outline how to calculate Cap Rate.

Example Problem #1:

1. First, determine the properties net operating income ($). • The properties net operating income ($) is given as: 5,000.
2. Next, determine the property value ($). • The property value ($) is provided as: 30,000.
3. Finally, calculate the Cap Rate using the equation above:

CR = NOI / MV

The values provided above are inserted into the equation below and computed.

CR = 5,000 / 30,000 = .1667

Example Problem #2:

For this problem, the variables required are provided below:

properties net operating income ($) = 6,000 property value ($) = 20,000