Costs

$

Expenses (Annual)

$

Income From Property:

$

Formula

$
minus
$
Divided By
$
Equals
%
If CAP RATE is greater than 5% Proceed with next phase of due diligence.
If CAP RATE is between 3-5% proceed with Caution.
If CAP RATE is less than 3% not recommended to proceed
The cap rate calculator is not intended to be the only tool used when deciding whether or not to buy a revenue property. The formula used in the cap rate calculator does not factor in all costs which may be associated with operating a property. Cash flow can vary dramatically from Cap Rates. The calculator is designed to provide a preliminary view of basic financials of such a transaction. Before deciding whether to proceed we advise you to seek independent advice about whether such a transaction is appropriate for you.
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