Cap Rate Calculator
This cap rate calculator finds net operating income and capitalization rate on a Florida property. It compares deals before financing enters the picture.
By Onias Derilus, Mortgage Capital · NMLS# 1859012 · Last Updated: June 2026
Cap rate deliberately excludes financing: it measures the property, not your loan. Mortgage principal and interest are not operating expenses. Estimate only.
Cap rate is net operating income divided by price. It states the unlevered yield of a property, which is why it is the standard way to compare two buildings without the distortion of different loans.
Net operating income excludes the mortgage entirely. Adding principal and interest to the expense side is the most common mistake in a cap-rate calculation, and it makes every deal look worse than it is.
These figures are estimates. For neutral, official guidance on mortgage costs and what lenders can charge, see the CFPB's Owning a Home guide.
How to Use This Calculator
- 1
Enter the purchase price or current value.
- 2
Enter monthly gross rent and a vacancy allowance.
- 3
Enter annual taxes, annual insurance, monthly HOA and any other operating costs — management, maintenance reserves, utilities you pay.
- 4
Read the cap rate, and compare it against what similar Florida properties trade at rather than against a national benchmark.
The Formula & Assumptions
EGI = gross rent ×
(1 − vacancy%)
NOI = EGI − operating
expenses
Cap rate = NOI ÷ price
Operating expenses include taxes, insurance, association dues, management, maintenance and any owner-paid utilities. They exclude mortgage principal and interest, depreciation and capital improvements.
Florida cap rates vary sharply by county and property type. A Miami-Dade condo and a St. Lucie single-family can differ by several points on the same day, driven by insurance cost and association exposure rather than by rent.
Because cap rate ignores financing, two investors buying the same building at the same price share a cap rate but can have very different cash-on-cash returns. Use cap rate to compare properties and cash-on-cash to compare deals.
Frequently Asked Questions
What is a good cap rate in Florida?
It depends entirely on the submarket and property type. Stabilized single-family rentals in the Treasure Coast often trade at higher cap rates than Miami-Dade condos, because buyers accept a lower yield where they expect stronger appreciation. Compare against local comparable sales, not a national figure.
Should the mortgage be in the calculation?
No. Cap rate measures the property independent of how it is financed. Including principal and interest turns it into a different metric and makes properties incomparable, since every buyer carries different debt.
Does a higher cap rate mean a better deal?
Not by itself. A higher cap rate usually signals higher perceived risk — older buildings, weaker submarkets, or association and insurance exposure. Read it alongside condition, location and the reason the seller is pricing it there.
How do condo fees affect cap rate?
Directly and heavily. Association dues are an operating expense, so a Florida condo with high dues and a recent special assessment can show a much lower cap rate than an equivalent single-family home at the same price and rent.
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Rates are illustrative only. APR and payments vary by credit score, loan amount, and market conditions. Subject to credit approval. Not a commitment to lend. NMLS# 1859012. Equal Housing Lender.
It calculates the capitalization rate on an investment property: net operating income divided by purchase price. Cap rate compares deals on their own merits, before financing.
Cap Rate Calculator in Florida
Florida cap rates swing on the insurance line more than almost any other state. A coastal property can carry a premium several times an inland one, which moves net operating income and the cap rate with it. Short-term rental markets near the beaches often show higher gross rent and higher expenses, so model both sides before comparing them to a long-term rental inland.
How the Cap Rate Calculator Works
The calculator subtracts operating expenses and vacancy from gross rent to find net operating income. It then divides that figure by the purchase price to produce the cap rate.
The Cap Rate Formula, Explained
Cap rate = net operating income / purchase price
Net operating income is rent after vacancy, taxes, insurance, management, and maintenance. It deliberately excludes the mortgage, which is why cap rate compares two properties regardless of how each buyer finances it.
A higher cap rate means more income per dollar of price. It usually signals either a better deal or more risk, so read it alongside the location and the condition of the building.
The Complete Cap Rate Calculator Guide
Cap rate is the first number most investors run, because it strips financing out of the comparison. Two buyers can pay the same price for the same building and get very different mortgages. The cap rate is identical for both.
The expense side is where estimates go wrong. Vacancy, management, and maintenance are easy to leave out, and each one lowers net operating income directly. A cap rate built on gross rent rather than net income will always look better than the deal is.
Use the calculator to test the expense assumptions rather than the price. Raising the insurance estimate by two thousand dollars a year tells you more about a Florida deal than shaving the purchase price by the same amount.
Cap Rate Calculator FAQ
What is a good cap rate?
It depends on the market and the risk. Many Florida long-term rentals trade between 5% and 7%, while higher numbers often carry more vacancy, more management, or more deferred maintenance.
Does cap rate include the mortgage?
No. Cap rate uses net operating income, which excludes financing on purpose. Use cash-on-cash return when you want a number that reflects your actual loan.