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.
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 hub and its NOI and 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.
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
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.
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:
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 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.
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.