Property investors, realtors, and landlords

Real Estate Cap Rate & Cash Flow Calculator

Calculate cap rate, cash-on-cash return, and monthly net cash flow from purchase price, down payment, mortgage rate, rent, vacancy, tax, and insurance. Review the live result first, then use the formula notes and related calculators for deeper planning.

Formula Snapshot

Cap Rate = Net Operating Income / Purchase Price

Cash-on-Cash Return = Annual Pre-tax Cash Flow / Cash Invested

Property inputs

Effective modeled rate: 6.75%

Cap rate

7.2%

NOI / asset value

Cash-on-cash

5.4%

Annual cash flow / cash invested

Monthly cash flow

$472

After modeled debt service

Operating and financing view

Effective monthly rent$3,135
Monthly debt service$2,043
Annual NOI$30,180
Loan amount$315,000
Cash invested$105,000

How do you calculate a property's capitalization (Cap) rate?

Calculate Cap Rate by dividing the Net Operating Income (NOI) by the current market value or purchase price of the asset: Cap Rate = NOI / Asset Value. A good cap rate typically sits between 4% and 10% depending on the market.

Inputs and Formula Variables

Purchase price (USD)

The asset value denominator used for capitalization rate and loan sizing.

Down payment (%)

The cash invested at closing before financing the remaining property balance.

Interest rate (%)

The mortgage interest assumption used to calculate debt service and sensitivity.

Gross monthly rent (USD)

The top-line rental income before vacancy and operating expense deductions.

Estimated vacancy rate (%)

The rent-loss percentage that adjusts gross rent into effective income.

Property tax and insurance (USD/month)

The recurring ownership expense included in NOI and monthly cash-flow estimates.

Cap rate versus cash-on-cash return

Cap rate is an unlevered property yield based on NOI and asset value. Cash-on-cash return includes financing, so the same property can have a stable cap rate and a volatile cash-on-cash return when interest rates move.

NOI = Effective Gross Rent - Operating Expenses
  • NOI excludes mortgage principal and interest.
  • Monthly cash flow subtracts debt service from effective rent after expenses.
  • Cash-on-cash return measures annual cash flow against the down payment cash invested.

Related Calculators

Mortgage Amortization ScheduleReview the debt-service curve behind cash flow.Compound Interest CalculatorCompare property returns against reinvested cash.

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