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Commercial Real Estate Underwriting

Real Estate Cap Rate & ROI Estimator

Evaluate purchase price, monthly rent, operating expenses, NOI, cap rate, 50% rule, and 1% rule in a polished institutional-grade dashboard.

Investment Inputs

Operating Expenses

Live results

Result Dashboard

Estimated Cap Rate
5.94%
Gross Monthly Income
$18,500
Total Monthly Expenses
$6,125
NOI
$12,375
Annual NOI
$148,500
50% Rule
Pass

Operating expenses are 33.11% of gross income.

1% Rule
Fail

Monthly rent equals 0.74% of purchase price.

Simple ROI Proxy
5.94%
Price-to-Rent Ratio
11.3x

Real Estate Knowledge Center

What is a cap rate?

Cap rate is a standard real estate underwriting metric that measures the annual return generated by a property’s net operating income relative to its price.

How to calculate it?

Divide annual NOI by purchase price and multiply by 100%. This calculator does that instantly while you adjust rent and expenses.

What is a good cap rate?

A good cap rate depends on the market, asset quality, tenant strength, and financing environment. Investors often weigh higher cap rates against greater risk.

Tax benefits

Real estate investors may benefit from depreciation, interest deductions, maintenance expense deductions, and other tax strategies that can improve after-tax returns.

Checklist

1. Verify income stability

Use realistic monthly rent and vacancy assumptions before underwriting a deal.

2. Stress-test expenses

Review management, repairs, HOA, insurance, and leasing costs conservatively.

3. Compare to market cap rates

Benchmark the result against similar properties in the same neighborhood or submarket.

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