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Professional-grade tools to analyze real estate investments. Calculate returns, compare properties, and make data-driven decisions.

Understanding Investment Metrics

Cap Rate vs Cash-on-Cash Return

Cap Rate measures property value based on income potential, ignoring financing. It's useful for comparing properties regardless of how they're financed. Cash-on-Cash Return measures the actual return on your invested capital, accounting for leverage. Use cap rate to compare properties; use cash-on-cash to evaluate your investment returns.

What's a Good Cap Rate?

Cap rates vary by market and property type. In high-demand urban areas, cap rates of 4-6% are common. Secondary markets may offer 6-8%, while higher-risk areas might see 8-12%. A lower cap rate often indicates lower risk and higher appreciation potential, while higher cap rates may signal more cash flow but higher risk or less growth.

The Power of Leverage

Mortgage financing allows you to control a larger asset with less capital. While this amplifies returns when property values rise, it also increases risk. Use our calculators together to understand both the property's fundamentals (cap rate) and your actual investment performance (cash-on-cash return).

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