← Back to BlogMay 20267 minDan White
Cap Rate Calculator — Free Tool for Real Estate Investors
Cap rate tells you what a property yields as if you paid cash. It's the standard metric for comparing investment properties and evaluating whether you're paying a fair price relative to income. FreeDealCalc calculates it free as part of every rental analysis.
Market Context
Live Market Data
Washington, DC Housing Market
Cool Market
Data through Mar 2026
Median Sale Price
$590,000
+0.8% YoY
Median Days on Market
44 days
lower = faster market
Sale-to-List Ratio
99.7%
buyers' market
Homes Sold
4,457
last reported month
Source: Redfin Data Center. Updated monthly. Data reflects Washington, DC residential sales.
redfin.comCap Rate Formula
Cap Rate = NOI ÷ Purchase Price
NOI is gross rent minus operating expenses — before debt service. A property generating $18,000/year NOI purchased for $300,000 has a cap rate of 6%.
2026 Cap Rate Benchmarks by Market Type
- Class A gateway markets (NYC, DC, SF): 3–4.5% — high appreciation expectation, low yield
- Strong suburban markets: 4.5–6% — balanced yield and appreciation
- Secondary markets (Indianapolis, Columbus, Memphis): 6–9% — higher yield, lower appreciation
- Value-add distressed: 8–12%+ going-in, stabilized cap rate lower post-rehab
Calculate Cap Rate Free
Freddie calculates cap rate, cash-on-cash, and DSCR for any property in one free conversation — no spreadsheet needed.
Calculate My Cap Rate Free →Cap Rate vs. Cash-on-Cash
Cap rate ignores financing. Cash-on-cash measures your actual return on invested capital with your specific loan terms. A property with a 5.5% cap rate financed at 7.5% may produce negative cash-on-cash — you're earning less on the property than you're paying to borrow. Always run both metrics before making an offer.
Dan White is a licensed Virginia real estate agent at Pearson Smith Realty and founder of FreeDealCalc.com. He has been investing in real estate for 20+ years.