Cap Rate Calculator
Calculate the unleveraged income yield from annual NOI and property value.
Calculated directly from the assumptions shown.
Continue in the full model.
Move from this screening result to the complete Stabilised Asset Valuation Model.
Get the model · €49 incl. VATHow the Cap Rate calculation works
Cap rate = annual net operating income ÷ property value.
Example calculation
€750k of sustainable NOI on a €12.0m value implies a 6.25% cap rate.
How professionals use the result
Use cap rate to compare stabilised property income with value. Ensure the NOI definition matches the market evidence.
Common mistakes
- Using EBITDA when comparable cap rates use NOI
- Deducting interest from NOI
- Ignoring normalised vacancy
- Combining forward NOI with a trailing cap rate
Cap Rate Calculator FAQs
What does the Cap Rate calculator measure?
Calculate the unleveraged income yield from annual NOI and property value.
What formula does the Cap Rate calculator use?
Cap rate = annual net operating income ÷ property value.
Is the result suitable for a final investment decision?
Use it as a transparent screening calculation. Validate deal-specific tax, timing, financing and legal assumptions in a complete underwriting model before making a decision.
Do I need an account?
No. The calculator is free and runs in your browser. FormulaPlanet does not store your projects, inputs or results.
Is any input sent publicly?
No calculation is public by default. A shareable link is only created when you explicitly choose to copy one; that link contains the assumptions shown in its URL.
Why might my spreadsheet give a different answer?
Differences usually come from timing, compounding, sign conventions, fees or a different definition of the numerator or denominator. Match every period and definition before comparing.
What should I review alongside this result?
Use cap rate to compare stabilised property income with value. Ensure the NOI definition matches the market evidence.
Which mistakes are most common?
Using EBITDA when comparable cap rates use NOI; Deducting interest from NOI; Ignoring normalised vacancy; Combining forward NOI with a trailing cap rate.