RPV

Real Estate

Rental Property Valuation Calculator

Calculate effective income, NOI, cap-rate value, reference yield, DSCR, before-tax cash flow, GRM, and the value gap.

Annual scheduled gross rentVacancy and credit loss (%)Annual other property incomeAnnual operating expensesEntered market cap rate (%)Annual debt servicePurchase price reference

Effective gross income-

Net operating income-

Value indicated by entered cap rate-

NOI yield at reference price-

NOI divided by debt service-

NOI less debt service-

Reference price divided by gross rent-

Indicated value minus reference price-

Decision view

Rental income-to-value and coverage flow

Rental income-to-value and coverage flowEffective income becomes NOI before value, DSCR, and cash flow branch separately.

Exact scenario comparisonEntered market cap rate (%) changes while all other entered assumptions remain constant.

Entered market cap rate (%)	Effective gross income	Net operating income	Value indicated by entered cap rate	NOI yield at reference price	NOI divided by debt service	NOI less debt service	Reference price divided by gross rent	Indicated value minus reference price

How to use Rental Property Valuation Calculator

Enter scheduled rent, losses, other income, and expenses.
Enter market cap rate, annual debt service, and reference price.
Compare valuation, yield, and coverage together.

Calculator guide

Understanding Rental Property Valuation Calculator

Income valuation begins with rent actually expected to be collected, subtracts operating expenses to produce NOI, and divides NOI by an entered market cap rate.

Calculate effective income Vacancy reduces scheduled rent before other property income is added.

Derive NOI Debt service is not an operating expense and is not deducted here.

Capitalize the NOI A lower entered cap rate would indicate a higher value for the same NOI.

Measure reference yield and value gap The entered reference price implies a 6.867% NOI yield.

Calculation method

How the calculation works

Derive rental-property effective income, NOI, cap-rate value, reference yield, debt-service coverage, and before-tax cash flow from separately entered assumptions. Reduce scheduled rent for vacancy and credit loss, add other income, subtract operating expenses, then evaluate value and debt coverage separately.

Detailed calculation process

Translate rental income into NOI, value, and debt coverage

The default uses $42,000 rent, 6% vacancy, $1,800 other income, $14,500 expenses, 6.5% cap rate, $16,800 debt service, and a $390,000 reference price.

General formula: EGI = R(1-v/100)+I_oNOI = EGI-OV_cap = NOI/(c/100)Cap_ref = 100NOI/P_refDSCR = NOI/DSCF_BT = NOI-DS NOI excludes financing. Cap-rate value capitalizes NOI at the entered market yield, while DSCR and cash flow then compare that NOI with annual debt service.

What each symbol means

R, v Scheduled annual rent ($) and vacancy/credit loss (%).

I_o, O Other income and operating expenses ($/year).

EGI, NOI Effective gross income and net operating income ($/year).

c, V_cap Entered cap rate (%) and indicated value ($).

P_ref Reference purchase price ($).

DS, DSCR Annual debt service ($) and coverage ratio.

CF_BT Before-tax cash flow after debt service ($/year).

Worked substitution with the default inputs

1. Calculate effective income EGI = 42,000(1-6/100)+1,800EGI = $41,280 Vacancy reduces scheduled rent before other property income is added.

2. Derive NOI NOI = 41,280-14,500NOI = $26,780 Debt service is not an operating expense and is not deducted here.

3. Capitalize the NOI V_cap = 26,780/(6.5/100)V_cap = $412,000 A lower entered cap rate would indicate a higher value for the same NOI.

4. Measure reference yield and value gap Cap_ref = 100(26,780)/390,000 = 6.867%Gap = 412,000-390,000 = $22,000 The entered reference price implies a 6.867% NOI yield.

5. Check debt coverage and cash flow DSCR = 26,780/16,800 = 1.594CF_BT = 26,780-16,800 = $9,980 The same NOI both covers debt 1.594 times and leaves the displayed before-tax cash flow.

The default produces $26,780 NOI, a $412,000 cap-rate indication, 1.594 DSCR, and $9,980 before-tax cash flow.

Purpose-built visual

Income-to-value and coverage flow

A node flow keeps operating performance, indicated value, debt coverage, and cash flow distinct.

Live inputs Every plotted quantity is recalculated from the current form values.

Decision context Reference lines and endpoints retain their actual units.

Reconciliation The visual and calculation steps close to the displayed result.

Worked situations

Practical examples

The default uses $42,000 rent, 6% vacancy, $1,800 other income, $14,500 expenses, 6.5% cap rate, $16,800 debt service, and a $390,000 reference price.
The default produces $26,780 NOI, a $412,000 cap-rate indication, 1.594 DSCR, and $9,980 before-tax cash flow.

Better inputs

Useful tips

Change one assumption at a time and compare the live result and visual.
Keep all entered quantities on the units stated beside their fields.
Retain extra precision through intermediate steps and round only reported results.

Before relying on the result

Limitations and common mistakes

This is not an appraisal or lending decision.
Capital expenditures, reserves, taxes, fees, lease quality, and rent regulation are excluded.
The entered cap rate must come from relevant market evidence.

Reference

Key terms

NOI: Property income after operating expenses but before debt service.
Cap rate: NOI divided by property value.
DSCR: NOI divided by annual debt service.

Important note

Calculated from the entered property and financing assumptions. It does not replace lender, appraisal, legal, tax, or investment review.

Frequently asked questions

Why exclude mortgage payments from NOI?

NOI measures property operations before financing.

What does DSCR above one mean?

Modeled NOI exceeds entered annual debt service.

Is cap-rate value an appraisal?

No. It is one income approach using one entered rate.

Can other income include parking?

Yes, when it is a repeatable property-level annual amount.