Free calculator
Cap Rate Calculator
Enter the net operating income and the price to get the cap rate. Add a target cap rate to see the value that rate implies.
Runs entirely in your browser. Nothing is uploaded.
How to calculate cap rate
The capitalization rate is the unlevered yield of a property, the return it throws off before any financing.
Cap rate = Net operating income ÷ Price × 100
Net operating income (NOI) is all the income the property collects in a year minus every operating expense (taxes, insurance, management, repairs, utilities, a reserve), but before the mortgage. A property with $250,000 of NOI at a $3,500,000 price is a 7.14% cap rate.
Why it matters for RV parks and income property
Cap rate is how you compare two deals on the same footing and how you translate a rate into a price: at a given NOI, a lower cap rate means a higher price. The catch is that the number is only as honest as the NOI behind it. Sellers quote cap rates on their own optimistic NOI: peak-season occupancy, no management fee, no reserve. Re-run the cap rate on a normalized NOI and it usually moves a full point or more. That gap is your negotiation.
Questions
What is a good cap rate for an RV park?
It depends on the market, the quality of the park, and interest rates, but stabilized RV parks and campgrounds commonly trade in the 7% to 9% range, with premium destination parks lower and rural or transient-heavy parks higher. The more useful question is whether the cap rate is calculated on a real, normalized NOI rather than the seller's.
Should I use the seller's NOI or my own?
Your own. The seller's NOI usually leaves out a management fee, a capital reserve, realistic repairs, and the property-tax bill you would actually pay after a sale. Normalize those first, then compute the cap rate on the number you can defend.
Does cap rate include the mortgage?
No. Cap rate is deliberately unlevered, income minus operating expenses only, so two buyers with different loans can still compare the same property. Your financing shows up in cash-on-cash return and DSCR instead.
Related calculators
These calculators are quick estimators for screening. A full RVP Underwriter analysis normalizes the seller's numbers, verifies occupancy, researches your county's taxes and insurance, and prices three offer structures against your DSCR and cash-on-cash targets. Run a deal free.