How We Determine the Property Valuation and Cap Rate

How We Determine the Property Valuation and Cap RateOur valuation calculator uses the income capitalization approach to determine rental property value for commercial real estate located in the United States, including apartment buildings and mixed-use properties.

Users enter basic information about a property covering property size, construction quality, location and property income and expenses. The automated system then determines the Net Operating Income and assigns an appropriate cap rate, using the Risk Premium Approach described more thoroughly on the Frequently Asked Questions page.

Users are able to adjust the income and expense assumptions, and the cap rate, to arrive at an appraised value for commercial investment property. The calculator functions for all classes, sizes and types of apartment properties, allowing owners to estimate the value of small multifamily real estate, large apartment buildings or entire apartment communities.