What is this calculator?
Estimate net operating income and capitalization rate.
What can you use it for?
Use this tool to compare a financial scenario using the assumptions you control. Estimate net operating income and capitalization rate.
How to use it
- Enter property price.
- Enter monthly rental income.
- Enter annual operating expenses.
- Select Calculate (or Generate for random tools).
- Read the answer and any additional results below the form. Check the units and the limits of the method.
Formula and method
Capitalization rate = (monthly rental income × 12-annual operating expenses)/property price × 100
The formula uses the units and definitions shown above. Each input is substituted before the arithmetic is evaluated; the calculated output is rounded for display.
Worked example
Property price: 10000000, Monthly rental income: 80000, Annual operating expenses: 200000. The result is 760,000 (annual net operating income).
Assumptions and limits
Before financing, income tax and appreciation. Include vacancy allowance in expenses.
Frequently asked questions
What inputs does the Rental Property Calculator need?
Use property price, monthly rental income, annual operating expenses. Read the answer and any additional results below the form. Check the units and the limits of the method.
What assumptions apply to the Rental Property Calculator?
Before financing, income tax and appreciation. Include vacancy allowance in expenses.