Calculate the capitalization rate for any Florida investment property. A strong FL cap rate is 6%+ for cash-flow markets.
Cap Rate Calculator
Gross Annual Income—
Effective Gross Income (after vacancy)—
Total Annual Expenses—
Net Operating Income (NOI)—
Cap Rate—
Frequently Asked Questions
What is a good cap rate for Florida investment properties? +
A good cap rate in Florida is 6–8%+ for cash-flow markets like Jacksonville, Ocala, and Daytona Beach. Miami and South Florida markets typically run 4.5–6%, reflecting appreciation potential over immediate income. Under 4% means you're primarily buying appreciation.
How do I calculate cap rate? +
Cap rate = Net Operating Income (NOI) ÷ Purchase Price × 100. NOI is gross annual rent minus vacancy, property taxes, insurance, management fees, and maintenance. It does NOT include mortgage payments — cap rate is a property metric, not a financing metric.
Does cap rate include the mortgage? +
No. Cap rate is calculated on the property's income before financing. It lets you compare properties independent of how they're financed. To evaluate returns with your specific loan, use cash-on-cash ROI instead.
What expenses should I include when calculating cap rate? +
Include: property taxes, insurance (including wind/flood in FL), property management fees (8–10%), vacancy allowance (7–10%), maintenance reserves ($100–$200/month), and any HOA fees. Do NOT include mortgage payments in the cap rate calculation.
Why is Florida's cap rate lower than national averages? +
Florida's strong population growth, no state income tax, and warm climate attract more buyers, pushing prices up relative to rents. Markets like Miami trade on appreciation, compressing cap rates to 4.5–5.5%. Secondary FL markets (Jacksonville, Ocala, Gainesville) still offer 6.5–8% cap rates.
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