Cap rate calculator: what a property earns before the loan

Cap rate is the yearly operating income measured against the price, as if you had paid cash. It ignores your mortgage on purpose, which is exactly what makes it useful: two buyers with different financing get the same cap rate on the same building, so it is a number you can compare across properties.

Nothing here is sent anywhere and nothing is stored. The expense share starts at 50% because that is the screening rule the rest of this site is built on, and you move it once you know the real taxes and insurance. On a first pass that guess is the whole answer: half of what you type is an assumption, so treat the result as a filter and not as a valuation.

A cap rate says nothing about your loan, and that is its point and its limit. Two properties at 7% can behave nothing alike once one of them carries a mortgage at 6.75% and the other is paid in cash.

It also says nothing about the neighborhood, the roof, or whether the rent is above market. A high cap rate is often a building that nobody wants at a price that reflects it.

The number that answers the financing question is the break-even rent: how far the rent can fall before the property stops covering its loan and its expenses. That one has its own page.

One property at a time is fine for a listing you already like. Choosing between five is a different job, and that is what the Deal Screener does: the same arithmetic on five properties side by side, with the cash flow and the break-even rent of each. It works in Excel and in Google Sheets, and it costs nothing.