Cap Rate Calculator
Turn purchase price, rent, and operating costs into Net Operating Income (NOI) and an unlevered capitalization rate — in seconds.
The deal
Purchase price and the monthly rent the property would command in today's market.
Operating costs
Annual property tax rate, monthly insurance, and the operating reserves you set against rent.
Enter a purchase price and monthly rent to see your cap rate.
Monthly operating-expense breakdown
Every operating cost that flows into Net Operating Income (NOI). Mortgage principal and interest are deliberately excluded — cap rate is unlevered.
This is an estimate from the numbers you entered. A real cap rate is anchored by current leased comparables, the actual assessed property tax, and a quoted insurance premium — not typed assumptions. Always confirm with a full Comparative Market Analysis (CMA) before making an offer.
Skip the manual rent comp hunt
Fundry pulls leased comparables and assessed tax for any Georgia address and runs Net Operating Income, cap rate, and Cash-on-Cash return for you — flip, ground-up, or rental. Free.
Run a real CMA freeWhat a capitalization rate (cap rate) is
A capitalization rate is the unlevered annual return a rental property would produce if you paid all cash. It is the single most common yardstick income-property investors use to compare deals because it strips out financing — two investors looking at the same property arrive at the same cap rate even if one is paying cash and the other is borrowing 80%.
Cap rate = Net Operating Income (NOI) ÷ Purchase price
Net Operating Income is gross annual rent, minus vacancy, minus every operating expense the owner pays: property tax, insurance, property management, maintenance and turnover, and any utilities not billed to the tenant. Mortgage principal and interest are deliberately excluded — that is what makes cap rate unlevered.
What counts as a good cap rate
There is no universal "good" cap rate — it is always relative to risk. In Atlanta and other stable metro markets, single-family rentals in good school zones often trade in the 5% to 7% range. Older homes in working-class neighborhoods can clear 8% or higher because vacancy, turnover, and maintenance risk are higher and appreciation potential is usually lower.
When you compare cap rates, compare like with like: same property type, same submarket, same age cohort, same rent profile. A 9% cap rate on a 1960s house in a soft rental submarket is not actually higher-return than a 6% cap rate on a new build in a strong school zone once you bake in the real vacancy and capital-expenditure load.
Cap rate vs. Cash-on-Cash (CoC) return
Cap rate and Cash-on-Cash return answer two different questions. Cap rate asks: what is this property worth as a stream of income, ignoring how I pay for it? Cash-on-Cash asks: what return does my own cash earn after the bank takes its cut?
Because most rental loans are leveraged, the Cash-on-Cash return on a typical deal runs noticeably higher than its cap rate — financing amplifies the equity return when NOI exceeds the cost of debt. That is also why a deal with a tight cap rate can still pencil on Cash-on-Cash, and why a property with a healthy cap rate can pencil poorly if the loan is expensive. Use both numbers together.
From cap rate to a real rental analysis
A cap rate from typed inputs is a fast screen. A full Comparative Market Analysis (CMA) goes further: it pulls recent leased comparables to anchor rent, uses the assessed tax on record, and runs the full rental scenario — Net Operating Income, Cash-on-Cash, Debt Service Coverage Ratio (DSCR), and monthly cash flow — against your financing assumptions.
Fundry builds that full analysis on any Georgia address for free. Create a free account and run the rental numbers without manual data entry.
Frequently asked questions
What is a capitalization rate (cap rate)?+
A capitalization rate, or cap rate, is the unlevered annual return a rental property would deliver if you paid all cash. It is calculated by dividing the Net Operating Income (NOI) by the purchase price. Because it ignores financing, cap rate lets investors compare rental properties on equal footing regardless of how each deal is funded.
How do you calculate cap rate?+
Cap rate = Net Operating Income (NOI) divided by purchase price, expressed as a percentage. NOI is gross annual rent, minus vacancy, minus operating expenses (property tax, insurance, property management, maintenance, and any owner-paid utilities). It does not subtract mortgage payments, depreciation, or income taxes.
What is a good cap rate for rental property?+
Cap rate expectations vary by market and risk profile. In stable metro markets like Atlanta, single-family rentals commonly trade in the 5% to 7% range; older homes in working-class neighborhoods can clear 8% or more but carry higher maintenance and vacancy risk. A lower cap rate is not automatically bad — it usually reflects a safer location and higher appreciation potential.
What is the difference between cap rate and cash-on-cash return?+
Cap rate is unlevered: it assumes a 100% cash purchase and ignores debt. Cash-on-Cash (CoC) return is levered: it divides annual cash flow after the mortgage by the actual cash you put in (down payment plus closing costs). The same property can show a 6% cap rate and a 12% Cash-on-Cash return because financing amplifies the equity return.
What expenses should I include in Net Operating Income (NOI)?+
NOI includes every operating expense the owner pays: property tax, insurance, property management, maintenance and turnover, vacancy allowance, and any utilities not billed to the tenant. NOI excludes the mortgage payment (principal and interest), capital improvements, depreciation, and income taxes — those belong in a cash-flow or tax analysis, not in NOI.
Is this cap rate calculator free?+
Yes. The calculator is completely free and requires no sign-up. If you want Fundry to pull rent comparables and assessed taxes for any Georgia address and build the rental analysis automatically, you can create a free account.
Where deals get decided
Search any Georgia address. Fundry pulls the rent comparables, runs Net Operating Income, cap rate, and Cash-on-Cash return — flip, ground-up, or rental. Free.
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