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Real Estate · Valuation

Property Value from NOI

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Use this valuation shortcut to convert stabilized NOI into an estimated market value at a chosen cap rate.

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Income approach value

Net Operating Income / Cap Rate

$120,000 NOI divided by a 6% cap rate implies a $2,000,000 value.

Check your inputs before you rely on the result — calculations are informational only and depend entirely on the numbers you enter. See our Terms.

Variables and units

  • Net Operating Income

    Income after operating expenses.

    currency

  • Cap Rate

    Enter 6 for 6%.

    percent

Common mistakes

  • Entering cap rate as 0.06 instead of 6.
  • Using unstable NOI without normalizing major one-time items.

Step-by-step example

Income approach value

$120,000 NOI divided by a 6% cap rate implies a $2,000,000 value.