Commercial Property Valuation Calculator
Estimate commercial property value using the income capitalization approach (NOI / Cap Rate).
Inputs
Results
Estimated Value
$2,423,076.92
≈ 6 average U.S. homes
Net Operating Income
$157,500.00
≈ 11 used cars
How to Use This Calculator
- Enter Gross Annual Income — total scheduled rent before vacancy deductions.
- Set Vacancy Rate % and Annual Operating Expenses (taxes, insurance, maintenance, management).
- Enter Market Cap Rate for comparable properties in your submarket.
- Optionally enter Purchase Price to compare asking price against estimated value.
- Review Estimated Value (NOI divided by cap rate) and Net Operating Income.
- Check Value vs. Price to quantify whether the asking price reflects a premium or discount to income value.
How the result changes with Gross Annual Income
| Gross Annual Income | Estimated Value | Net Operating Income |
|---|---|---|
| $5,000,000.00 | $71,846,153.85 | $4,670,000.00 |
| $17,500,000.00 | $254,538,461.54 | $16,545,000.00 |
| $32,500,000.00 | $473,769,230.77 | $30,795,000.00 |
| $45,000,000.00 | $656,461,538.46 | $42,670,000.00 |
What each input means
- Gross Annual Income
- Total scheduled annual rental income before vacancy.
- Vacancy Rate
- Expected vacancy and collection loss percentage.
- Annual Operating Expenses
- Total annual operating expenses (taxes, insurance, maintenance, management).
- Market Cap Rate
- Market capitalization rate for comparable properties.
- Purchase Price (Optional)
- Actual or asking price to compare against estimated value.
How this is calculated
Worked example, using the default values
- Identify Input Parameters4 parametersGross Annual Income = 250000, Vacancy Rate = 5, Annual Operating Expenses = 80000, Market Cap Rate = 6.5 = 5 input(s) provided
- Calculate Estimated ValueEstimated Value2423076.92 = $2,423,076.92
- Calculate Net Operating IncomeNet Operating Income157500 = $157,500
- Calculate Effective Gross IncomeEffective Gross Income237500 = $237,500
- Calculate Gross Rent MultiplierGross Rent Multiplier10 = 10
Engine last updated . Checked against 2 independently-derived tests — how we verify calculators.
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