CAP Rate Calculator
Calculate capitalization rates, analyze investment properties, and compare real estate opportunities with detailed NOI analysis.
Purchase Information
Income
Annual Expenses
CAP Rate
5.93%
Net Operating Income
$29,640
Cash-on-Cash Return
5.65%
Monthly Cash Flow
$2,470
Annual Income
Annual Expenses
Net Operating Income
$29,640
Expense Ratio
35.0%
1% Rule
0.80%
Class A (Premium)
High-end properties, stable tenants
4-6%
Your property
Class B (Good)
Middle-market properties, good condition
6-8%
Class C (Value)
Older properties, higher risk/return
8-12%
Class D (Distressed)
High-risk properties, major repairs needed
12%+
| Scenario | Purchase Price | NOI | CAP Rate | Monthly Cash Flow |
|---|---|---|---|---|
| Current Property | $500,000 | $29,640 | 5.93% | $2,470 |
| Rent Increase 10% | $500,000 | $33,744 | 6.75% | $2,812 |
| Reduce Expenses 15% | $500,000 | $32,034 | 6.41% | $2,669.5 |
| Lower Purchase Price 10% | $450,000 | $29,640 | 6.59% | $2,470 |
Gross Monthly Rent
Before vacancy
$4,000
Vacancy Allowance
5% of gross rent
-$200
Effective Monthly Rent
After vacancy
$3,800
Monthly Expenses
All operating costs
-$1,330
Net Monthly Cash Flow
After all expenses
$2,470
Investment Analysis & Recommendations
- • Your 5.93% CAP rate is below average and may indicate overpricing
- • Monthly cash flow of $2,470 provides positive returns
- • Expense ratio of 35.0% is well-managed
- • 1% rule: 0.80% falls short of the 1% guideline
- • Total investment of $525,000 generates 5.65% cash-on-cash return
- • Consider negotiating a lower purchase price or finding higher rent potential
- • Increasing rent by 10% would improve CAP rate to 6.75% and add $342/month
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Sarah in Action
How Sarah handles your calls
Zero interruptions to your important work
Protect Your 5.9% CAP Rate
With a 5.9% CAP rate generating $2,470 monthly cash flow, every tenant interaction affects your investment returns. Sarah ensures professional property management.
Reduce Vacancy Rates
Sarah responds immediately to prospective tenant inquiries, helping you maintain your 95% occupancy rate and protect rental income.
Professional Tenant Relations
Sarah handles maintenance requests and tenant communications professionally, improving tenant satisfaction and reducing turnover costs.
Optimize Operating Efficiency
By streamlining communications and reducing management overhead, Sarah helps improve your 35% expense ratio and boost NOI.
“Sarah helped us reduce vacancy time from 45 days to 12 days by ensuring every inquiry gets immediate attention. That's an extra $8,000 in annual rental income.”
— Robert Chen, Property Investor
Property Performance
This quarter's improvement
+1.2%
CAP rate improvement
Financial Impact
Additional NOI
From reduced vacancy
$3,556.8
annually
Improved CAP Rate
New performance
7.1%
vs 5.9% before
Maximize Your Property Investment Returns
Don't let poor communication hurt your CAP rate. Sarah ensures professional property management and optimal tenant relations.
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