Free calculator · Valuation & Returns
Cap Rate Toolkit, Direct Cap · Band of Investment · R = Y − g
Values a property by direct capitalization and builds a cap rate two more ways, from a band-of-investment blend of debt and equity and from the growth decomposition R = Y − g. Inputs are stabilized NOI, a market cap rate, the LTV, mortgage constant, and equity dividend rate for the band, and a required return and long-term NOI growth rate.
By Devon Coombs, CPA, MBA · Teaching Professor of Finance, Santa Clara University · Reviewed August 2026
From the author: Devon Coombs, CPA, MBA teaches finance at Santa Clara University and works with corporate teams on practical AI.
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Cap Rate Toolkit, Direct Cap · Band of Investment · R = Y − g
Direct capitalization
Value = NOI ÷ Cap
$10,000,000
Band of investment
Indicated cap rate
7.72%
implies $6,472,492 on this NOI
Gordon Growth: R = Y − g
Implied cap rate (R)
4.5%
implies $11,111,111 on this NOI
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This calculator comes from the free Real Estate Finance course, where the concept is taught with readings, worked examples, and practice questions.
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Built by Devon Coombs, CPA, MBA, Teaching Professor of Finance at Santa Clara University.