Cap Rate Calculator
Estimate the capitalization rate (cap rate) on a NYC investment property: net operating income divided by total acquisition cost. Cap rate is an unlevered return metric — it ignores financing, so you can compare deals with different down payments or mortgages on equal footing.
Financing this purchase? See our Rental Property Calculator for cash flow and cash-on-cash return, or all our calculators.
Glossary
Capitalization rate: Net Operating Income (NOI) divided by the property’s total acquisition cost. It’s an unlevered yield — it assumes an all-cash purchase, so it lets you compare two properties’ fundamental returns without financing muddying the comparison.
Property taxes, insurance, common charges/HOA, maintenance, utilities, and management fees. Mortgage principal and interest do NOT count — NOI is calculated before financing costs, which is why cap rate is a financing-agnostic metric.
NYC cap rates typically run lower than the national average — often 3% to 5% for well-located condos and multifamily, reflecting the market’s emphasis on appreciation over yield. Compare within the same property type and neighborhood; a “good” cap rate in the Bronx and in Tribeca are different numbers.
Cap rate measures return on your total investment, not just the sticker price. A property that’s cheap to buy but needs a $100k gut renovation isn’t actually a bargain until that cost is factored into the denominator.