Free Cap Rate Calculator
for Rental Properties
Enter your property's income and expenses to instantly calculate cap rate — and find out what it means for your next refinance decision.
Want to know if you should refinance this property? We already have your operating numbers — just add your loan details.
Run the full refi analysis →Start fresh in the appWhat's a good cap rate?
Depends entirely on the market. Here's how to read where yours falls.
Cap rate tells you what you own.
RefiSignal tells you what to do with it.
Cap rate measures income yield independent of financing — useful for comparison, but it doesn't move when you refinance. What does move: DSCR, monthly cash flow, and break-even. Those are the numbers that drive the refi decision.
We already captured your rent, taxes, insurance, and operating percentages above. The full refi analysis just needs your current loan balance and a rate quote. Takes 60 seconds.
assumptions from the calculator
Understanding cap rate
Three things every rental investor should know.
Cap rate ignores your mortgage
That's by design. Cap rate is a property metric, not a financing metric. It lets you compare two properties regardless of how they're financed — useful for acquisition analysis.
Refinancing doesn't move cap rate
When you refinance, your NOI stays the same. Your property value stays the same. Cap rate doesn't change. For refi decisions, you need DSCR, cash flow delta, and break-even instead.
Cap rate vs. cash-on-cash return →Assumptions drive the number
A 7% cap rate with 5% maintenance looks very different than 7% with 10% maintenance. Turnkey proformas often use optimistic assumptions. Run it yourself with realistic numbers.
Conservative vs. base case underwriting →Common questions
It depends entirely on the market. In coastal gateway cities, 3–5% is typical. In healthy primary markets like Austin or Charlotte, 5–7%. In secondary Midwest markets like Cleveland or Akron, 6–9%. There's no single correct number — what matters is whether the cap rate reflects that market's risk, appreciation profile, and vacancy baseline.
Use current market value for the most accurate picture of your property's yield today. Purchase price cap rate (called "going-in cap rate") is useful for tracking how your return has changed since acquisition — but it doesn't reflect what the asset is actually worth now.
No. Cap rate is calculated before debt service. It only uses NOI (income minus operating expenses, not including mortgage). That's what makes it useful for comparing properties across different financing structures — and what makes it a poor metric for refinance decisions. For refi analysis, DSCR and cash flow improvement are the right inputs.
Cap rate ignores financing entirely. Cash-on-cash return measures actual cash flow as a percentage of the cash you invested (down payment plus closing costs). A property can have a 6% cap rate and a 12% cash-on-cash return if it's leveraged and rents are strong. Read the full breakdown →