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

Test your knowledge using the equation and check your answer with the calculator.

CR = NOI / MV = ?