Models & Tools
Cap Rate & NOI
Separate property operating income from financing and compare unlevered income yields.
Example inputs — replace with your own
Capitalization rate
7.40%
Effective gross income
$114,000.00
Net operating income
$74,000.00
| Target cap rate | Implied value |
|---|---|
| 5% | $1,480,000.00 |
| 6% | $1,233,333.33 |
| 7% | $1,057,142.86 |
| 8% | $925,000.00 |
| 9% | $822,222.22 |
How this works / Assumptions
EGI = gross rent × (1 − vacancy rate) + other income NOI = EGI − operating expenses Cap rate = NOI / property value Implied value = NOI / target cap rate
All income and expenses are annual. Vacancy applies to rent only; other income is assumed collectible. Operating expenses should include recurring property costs, but exclude debt service, income taxes, depreciation, and capital expenditures. Cap rate is an unlevered income yield, not a total return. Negative NOI produces negative mathematical implied values, which are not market appraisals.
Educational tool. Results are estimates based on your inputs and do not constitute financial advice.