Cap Rate by Purchase Price
Cap rate depends on rent relative to price, not on price itself, which is why the cap rate column below is nearly flat. The rent column is the one to compare against your market. Assumptions: rent at 0.85% of price, 5% vacancy, taxes 1.2% and insurance 0.5% of price, 18% of collected rent for maintenance, reserves and management.
| Price | Typical rent | NOI | Cap rate | Rent for 7% |
|---|---|---|---|---|
| $100k | $850 | $6,246 | 6.25% | $930 |
| $150k | $1,275 | $9,369 | 6.25% | $1,395 |
| $200k | $1,700 | $12,492 | 6.25% | $1,860 |
| $250k | $2,125 | $15,615 | 6.25% | $2,325 |
| $300k | $2,550 | $18,737 | 6.25% | $2,790 |
| $350k | $2,975 | $21,860 | 6.25% | $3,255 |
| $400k | $3,400 | $24,983 | 6.25% | $3,725 |
| $500k | $4,250 | $31,229 | 6.25% | $4,655 |
| $600k | $5,100 | $37,475 | 6.25% | $5,585 |
| $750k | $6,375 | $46,844 | 6.25% | $6,980 |
| $1m | $8,500 | $62,458 | 6.25% | $9,305 |
| $1.5m | $12,750 | $93,687 | 6.25% | $13,960 |
| $2m | $17,000 | $124,916 | 6.25% | $18,615 |
Each price has its own page with rent and expense sensitivity tables. Or run your exact property in the cap rate calculator.