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Enter income, vacancy, and operating expenses to get NOI and capitalization rate. Unlevered, the way buyers and appraisers compare properties. Nothing you type leaves your browser.
| Line | How it is calculated |
|---|---|
| Effective gross income | Gross rent − vacancy loss + other income |
| Net operating income | Effective gross income − operating expenses |
| Cap rate | NOI ÷ purchase price |
| Operating expense ratio | Operating expenses ÷ effective gross income |
The expense ratio is the number most worth checking against reality. Owner-reported opex on a listing is often understated because management, reserves, or the owner's own labor are missing. If a seller hands you a 25% expense ratio on a small multifamily building, ask which lines are not in it.
Underwriting a deal and want the numbers checked by someone who does this daily? That is a 20-minute conversation.
Book a free consultationIt depends entirely on market and asset class, so there is no universal number. A cap rate is a price-to-income ratio, not a quality score: a low cap rate means you paid more per dollar of income, which is normal in low-risk, high-demand markets. Compare a property only against recent sales of similar assets in the same submarket.
No. Cap rate is deliberately unlevered — it measures the property, not your financing. Debt service never belongs in NOI. That is what makes cap rates comparable between a cash buyer and a leveraged one.
Property taxes, insurance, management, repairs and maintenance, utilities you pay, HOA or admin, and turnover costs. Excluded: mortgage principal and interest, capital improvements, depreciation, and income taxes. Putting any of those four in opex understates NOI and makes the cap rate look worse than it is.
Both, for different questions. Cap rate compares properties to each other independent of how you pay for them. Cash-on-cash measures what your specific deal returns on the cash you actually put in, after debt service.
General information, not tax or accounting advice. Your situation and current law (which changes) govern; confirm with a qualified advisor.
This calculator is provided for informational purposes only. Using it does not create a client relationship, and its output is not tax advice for your situation — it is a general model that cannot see your facts. Parikh Financial does provide tax services, under a written engagement, and nothing on this page is a substitute for that. We do not provide legal or investment advice, we are not a registered investment adviser, and we do not perform attest services. Use of this calculator is entirely at your own risk, and Parikh Financial assumes no liability for its use or for any reliance on its output. Parikh Financial does not guarantee the calculator’s accuracy or its applicability to your particular circumstances. It is provided “as is”, without warranty of any kind, whether express, implied, or statutory, including without limitation any warranty of merchantability, fitness for a particular purpose, title, or non-infringement. Some jurisdictions do not allow the exclusion of implied warranties, so these exclusions may not apply to you. Tax law changes frequently and any figures shown reflect published federal amounts as of the date of this page.
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