If you’re a real estate investor or landlord, determining the net operating income, or Cap Rate, of a property or prospective investment is often difficult and time consuming. You have to know the rate at which income is discounted for a property in order to determine its true value, and to see if it’s in-line with comparable properties in the market.
Now there’s an easy way to do that, and it’s free. The Cap Rate Calculator is an online solution that can quickly and accurately determine this critical financial component. Here’s how it works.
Simply input the four factors noted below and the Cap Rate Calculator will reveal a property’s Cap Rate.
- The property’s value
- Gross rental income
- Vacancy rate percentage
- Operating expenses
For example, if an apartment building has a value of $1.3 million, annual rental income of $200,600, a 3% vacancy rate and operating expenses of 42%, the Cap Rate is 8.68%. It’ that simple.
The Cap Rate Calculator is free and brought to you by ProAPOD. You don’t have to sign-up and there’s no obligation or hidden fees.