How to Calculate Cap Rate for a U.S. Rental Property
How do you calculate Cap Rate for a rental property?
Cap Rate = Net Operating Income (NOI) ÷ Property Purchase Price. Example: a $400,000 rental that generates $42,000 in annual rent and has $10,000 in annual operating expenses has NOI of $32,000 and a Cap Rate of 8%.
Updated 2026-04-23