--- title: "Real Estate Cap Rate" description: "Calculate NOI, cap rate, and cash-on-cash return for a rental property. Enter purchase price, income, expenses, and financing terms to see the full breakdown." canonical: https://www.getswoopr.com/tools/real-estate-cap-rate-calculator/ source: "Swoopr Investment: https://www.getswoopr.com" --- Real Estate Tools # Real Estate Cap Rate & Cash-on-Cash Calculator Turn a rental property's numbers into NOI, cap rate, and financed cash-on-cash return. Enter a property's purchase price, income, operating expenses, and financing terms to see net operating income (NOI), capitalization rate, and cash-on-cash return, calculated the same way Swoopr's Real Estate & REIT Investing hub defines them. Search guides, glossary terms, tools and answers Search Learn real estate investing first Go to calculator ![A close-up of hands analyzing mortgage rate documents with a pen and calculator in a business setting.](https://www.getswoopr.com/images/hero/tools-real-estate-cap-rate-calculator.webp) *Photo by [RDNE Stock project](https://www.pexels.com/@rdne) via [Pexels](https://www.pexels.com/photo/a-person-holding-a-pen-8292895/)* ## Direct Answer > Net operating income (NOI) is gross property income minus operating expenses, excluding debt service and capital expenditures. Cap rate is NOI divided by property value. Cash-on-cash return is annual pre-tax cash flow (NOI minus annual mortgage debt service) divided by total cash invested (down payment plus closing and upfront repair costs). These are the same definitions Swoopr's [Real Estate & REIT Investing](https://www.getswoopr.com/real-estate-reits/) hub and its [NOI](https://www.getswoopr.com/sector-analysis/reit-noi/) and [cap rate](https://www.getswoopr.com/sector-analysis/reit-cap-rate/) explainers use, so the numbers below stay consistent with the rest of Swoopr's real-estate education. ## Cap Rate & Cash-on-Cash Calculator Results are mathematical estimates based on the numbers you enter. Not investment advice. All calculation happens locally in your browser; nothing is sent to a server. Property & Income Purchase price ($) What you're paying (or plan to pay) for the property. Must be greater than 0. Property value for cap rate ($) (optional) Use this to compute cap rate against an appraised or estimated value that differs from the purchase price. Leave blank to use the purchase price. Gross annual rental income ($) Total rent collected over a year, before any expenses. Other annual income ($) (optional) Any other annual property income beyond rent. Annual operating expenses ($) Property taxes, insurance, maintenance, management, utilities, and vacancy loss. Excludes mortgage principal, interest, and capital expenditures. Financing (for cash-on-cash return) Down payment (% of purchase price) Between 0 and 100. Enter 100 for an all-cash purchase (no loan, no debt service). Loan interest rate (annual %) Annual mortgage interest rate. Enter 0 for a 0% loan. Ignored when down payment is 100%. Loan term (years) Length of a standard fully-amortizing loan, in years. Closing costs ($) (optional) Upfront closing costs, added to total cash invested. Upfront repair/rehab costs ($) (optional) Any upfront repair or rehab spend before renting, added to total cash invested. Calculate Clear ### Results #### Net Operating Income N/A Gross income minus operating expenses #### Cap Rate N/A NOI ÷ property value #### Cash-on-Cash Return N/A Annual pre-tax cash flow ÷ total cash invested Gross income N/A Operating expenses N/A Net operating income (NOI) N/A Property value used for cap rate N/A Down payment N/A Loan amount N/A Monthly debt service N/A Annual debt service N/A Total cash invested N/A Annual pre-tax cash flow N/A Results are mathematical projections from the inputs you provided, assuming a standard fully-amortizing fixed-rate loan and constant income/expenses. They don't account for taxes, appreciation, vacancy variability beyond what you enter, or changes in financing terms. Use them as a planning baseline, not a guarantee. ### Exit cap sensitivity Resale value is next year's NOI divided by the cap rate a future buyer applies, and neither number is knowable today. This grid holds your inputs fixed and varies only those two, so you can see how much of a projected outcome rests on assumptions nobody controls. Hold period (years) Years until sale. Cap rate scenarios run from 100 basis points below your entry cap rate to 100 above it. Cells to the left of the centre column assume the market repriced in your favour, which is usually the assumption doing the most work in an attractive projection. NOI growth is compounded at a constant rate, which real NOI does not do: it moves with lease rollovers, vacancy and expense shocks. Sale costs, loan payoff and taxes are deliberately excluded, because each needs an assumption this calculator has no basis to make. ## Methodology The calculator applies the formulas below directly to your inputs: NOI = Gross income − Operating expenses Cap Rate = NOI ÷ Property value Annual debt service = Standard fixed-rate mortgage payment × 12 Annual pre-tax cash flow = NOI − Annual debt service Cash-on-Cash Return = Annual pre-tax cash flow ÷ Total cash invested - **Gross income** = gross rental income + other income (parking, laundry, storage, etc.). - **NOI** excludes debt service (mortgage principal and interest) and capital expenditures, matching Swoopr's [NOI](https://www.getswoopr.com/sector-analysis/reit-noi/) explainer's convention. - **Cap rate** is financing-agnostic: it doesn't change based on down payment or loan terms, because NOI itself never includes debt service. - **Annual debt service** uses the standard fixed-rate amortizing mortgage formula, M = P × r(1+r)n ÷ ((1+r)n − 1), where P is the loan amount, r is the monthly interest rate, and n is the total number of monthly payments. A 0% interest rate uses a straight-line payment (loan amount ÷ number of payments) instead. - **Total cash invested** = down payment + closing costs + upfront repair/rehab costs. - Entering a 100% down payment models an all-cash purchase: debt service is 0, and cash-on-cash return equals cap rate exactly (before closing/repair costs). ### Assumptions and limitations - Assumes a single, standard fixed-rate, fully-amortizing loan. It does not model adjustable rates, interest-only periods, balloon payments, or multiple loans. - NOI and financing inputs are treated as constant for a full year. Real properties can see seasonal or year-to-year changes in rent, vacancy, and expenses. - Cash-on-cash return is pre-tax and does not account for depreciation, mortgage interest deductions, or other tax effects. - Does not account for property appreciation, principal paydown building equity over time, or eventual sale proceeds. It is a snapshot of year-one cash economics, not a full return-on-investment model. - All calculation happens locally in your browser using the inputs on the page; nothing is fetched from or sent to a server. ## Related Reading - [Real Estate & REIT Investing: hub](https://www.getswoopr.com/real-estate-reits/) - [REIT NOI Explained](https://www.getswoopr.com/sector-analysis/reit-noi/) the full formula and worked example. - [REIT Cap Rate Explained](https://www.getswoopr.com/sector-analysis/reit-cap-rate/) relating income to value. - [REIT FFO Explained](https://www.getswoopr.com/sector-analysis/reit-ffo/) a complementary metric for public REITs. - [Free Stock & Crypto Trading Tools](https://www.getswoopr.com/tools/) the section this guide belongs to - [APY / Effective Yield Calculator](https://www.getswoopr.com/tools/apy-effective-yield-calculator/) a companion guide in this cluster - [Balance Transfer Calculator: The Fee Against the Interest It Buys Out](https://www.getswoopr.com/tools/balance-transfer-calculator/) a companion guide in this cluster - [CD Ladder Builder](https://www.getswoopr.com/tools/cd-ladder-builder/) a companion guide in this cluster - [Company Metric Comparison Dashboard](https://www.getswoopr.com/tools/company-fundamentals-comparison/) a companion guide in this cluster - [Compound Growth & Contribution Calculator](https://www.getswoopr.com/tools/compound-growth-calculator/) a companion guide in this cluster ## FAQ ### What is net operating income (NOI)? Net operating income (NOI) is a property-level measure of income after operating expenses but before financing costs and capital expenditures. NOI = Gross property income − Operating expenses. It excludes debt service (mortgage principal and interest) and capex, which are layered on separately when evaluating financed returns. ### How is cap rate calculated? Capitalization rate (cap rate) relates a property's income to its value: Cap Rate = NOI ÷ Property value. It is a financing-agnostic measure, unaffected by how the property is paid for, and is most useful for comparing similar properties or tracking a single property's income yield over time. ### What is cash-on-cash return? Cash-on-cash return measures annual pre-tax cash flow relative to the actual cash invested: Cash-on-Cash Return = Annual pre-tax cash flow ÷ Total cash invested. Annual pre-tax cash flow is NOI minus annual mortgage debt service. Unlike cap rate, cash-on-cash return depends on financing terms, so two investors buying the same property with different down payments and loan terms get different cash-on-cash returns. ### Why does the mortgage payment affect cash-on-cash return but not NOI? NOI is designed to measure a property's income-producing ability independent of how it is financed, so debt service is deliberately excluded from it. Cash-on-cash return, by contrast, measures the return on the investor's actual out-of-pocket cash, so the mortgage payment is subtracted from NOI as a cash outflow at that later step, not folded into NOI itself.