What is a good cap rate for investment property?

Cap rates of 5–10% are commonly considered reasonable, depending on market and property type. Higher cap rates indicate higher return potential but often carry more risk.

Cap Rate Calculator

Estimate cap rate and gross rent multiplier for a property.

This tool runs in your browser. None of your data is saved or sold.

Annual net operating income ($)

Property price ($)

Closing / rehab costs ($)

Annual gross rent ($)

About This Calculator

Cap rate (capitalization rate) is the most widely used metric for evaluating income-producing real estate. It measures the relationship between net operating income and property price, independent of financing. This calculator also shows the gross rent multiplier as a quick cross-check.

Estimates only — not financial, tax, legal, or investment advice. Verify important results with a qualified professional before making decisions.

cap rate = net operating income ÷ property value × 100; GRM = price ÷ annual gross rent; total basis = property price + closing / rehab costs