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How to Calculate Rental Property

Analyze rental property investment: NOI, cash flow, cap rate, and cash-on-cash return.

The Formula

capRate = NOI / purchasePrice * 100

The rental property formula uses the mathematical relationship: capRate = NOI / purchasePrice * 100. Each variable in the formula represents a measurable quantity that affects the final result.

Step-by-Step Method

  1. 1Identify all input values needed for the rental property calculation.
  2. 2Substitute your known values into the formula: capRate = NOI / purchasePrice * 100.
  3. 3Perform the arithmetic operations in the correct order (PEMDAS/BODMAS).
  4. 4Check that your result has the correct units and is within a reasonable range.
  5. 5Verify using the interactive Rental Property Calculator to confirm your answer.

Related Topics

rental propertyreal estatecap ratecash on cashNOI

Use the Interactive Calculator

Skip the manual math — get instant results with our free Rental Property calculator.

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