Rental Property Value Calculator
The income approach in one screen: net operating income divided by cap rate, with a gross-rent-multiplier view as the cross-check.
Income approach (NOI ÷ cap)
Indicated value
GRM cross-check
GRM-indicated value
Worked example
A rural Dollar General collects $97,980 of NOI on an absolute-net lease. Comparable seasoned DG paper trades near a 6.9% cap, so the income approach indicates $1,420,000. Cross-check with GRM: if similar deals run about 13.4× gross rent, $106K of gross rent also lands near $1.42M — two roads, one neighborhood. When the two approaches diverge sharply, your expense assumptions (or the comp set) need another look before your offer does.
The number that matters most
Small cap-rate changes swing value hard: the same $97,980 NOI is worth $1,633,000 at 6.0% and $1,306,000 at 7.5%. That 150-basis-point spread — roughly the gap between a fresh lease and a seasoned one — is why term, credit, and comps deserve more diligence hours than anything else in the deal file. Try the cap rate calculator to work the same equation from the other direction.
Email me my results
Methodology & FAQs
How does the income approach value a rental property?
Value equals net operating income divided by capitalization rate. NOI is what the property earns after operating expenses (before debt and income taxes); the cap rate is the market's required yield for that risk. $97,980 of NOI at a 6.9% cap prices at $1,420,000. Change either input and the value moves with it — which is why cap-rate selection is where the real judgment lives.
What cap rate should I use for my property?
The rate recent comparable sales actually traded at — same tenant quality, term, market tier, and lease structure. National averages mislead: a corporate Wawa and a vacant-adjacent strip both count as 'retail.' For net lease deals, our tenant pages publish typical ranges (marked for quarterly review); for anything you're seriously pricing, we pull live comps rather than trusting a published average, and you should too.
What is GRM and when is it more useful than a cap rate?
Gross rent multiplier — price divided by gross annual rent, ignoring expenses. It's cruder than NOI ÷ cap but useful when expense data is unreliable or for quick screening across many small residential-style deals: a market trading at 10× gross tells you a $120K-gross property should sit near $1.2M. For NNN deals with clean expense structures, cap rate is the better tool; GRM is the sanity check.
Why does my calculated value differ from a broker's or the assessor's number?
Different NOI definitions and different cap assumptions. Brokers may quote pro-forma NOI (after theoretical rent bumps) at aspirational caps; assessors use mass-appraisal formulas lagging the market; your lender's appraiser will underwrite in-place income at defensible comps. Run this calculator with in-place NOI and a comp-supported cap and you'll usually land closest to the appraiser — the number that actually decides your financing.
Keep Exploring
More Calculators
Put It to Work
Numbers looking right? We'll find the deal to match them.
Free buyer representation. No obligation. Reply within 24 hours.