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Property investment
Cap Rate Calculator
Find a property's capitalization rate — its net operating income as a percentage of price. Enter the price, rent, a vacancy allowance and yearly running costs, and you'll get the cap rate, the NOI behind it, and the gross yield for reference.
Property & income
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Cap rate—
Net operating income (NOI)—
Effective annual rent—
Gross yield (rent ÷ price)—
How it's calculated
Annual rent is reduced by the vacancy allowance to give effective income, then operating expenses are subtracted for the net operating income. The cap rate is that NOI divided by the price. It deliberately ignores your loan — it measures the property, not the financing.
Cap rate = (annual rent × (1 − vacancy) − expenses) ÷ price × 100. Add a loan in the cash flow calculator.
Frequently asked questions
Cap rate vs rental yield?
Gross yield uses rent only; cap rate uses NOI (rent after vacancy and expenses), so it's a truer return figure.
Does cap rate include the loan?
No — it's unleveraged. Use cash-on-cash return for the leveraged picture.
Why are Indian cap rates low?
Residential prices are high relative to rent, so 2–4% is common; commercial tends to be higher.