Real estate & rental
Real Estate Agent Cap Rate Calculator
A quick cap rate for showing an investor client, with the expense assumptions made visible.
Result
Not investment advice. The expense ratio is doing most of the work here and a seller's pro forma almost always understates it. Verify against actual statements, tax records and insurance quotes before an investor relies on the number.
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About this calculator
Why does the target price matter?
Because it turns a subjective negotiation into arithmetic. An investor client with a 6.5% target has a defensible number to offer, derived from the income rather than from the asking price.
What expense ratio should I assume?
Thirty-five to fifty percent of gross rent for most residential property, including vacancy and reserves. Anything under thirty usually means something has been left out.
The formula
cap rate = NOI / price; target price = NOI / target cap rate
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