Office Property Calculator
The full deal analysis — cash flow, cap rate, cash-on-cash, DSCR and the return at exit for a commercial property. Live calculator with worked steps and charts.
Calculator
The price you pay, before closing costs.
Investment loans typically require 20–30% down.
Gross scheduled rent before vacancy.
Share of scheduled rent lost to turnover and non-payment.
Share of effective income budgeted for repairs.
Share of collected rent charged by the manager.
Commission plus closing costs, as a share of sale price.
The annual return you require to tie up cash.
Advanced options (9)
Laundry, parking, storage, late fees, pet rent.
The non-depreciable land keeps the rest.
This commercial property calculator runs on a full rental pro-forma: rent is annualised and reduced by vacancy, every operating expense is itemised to reach NOI, and the loan amortises monthly at the rate entered. Results update live as you type.
Amortization schedule
| Year | Interest | Principal | Ending Balance |
|---|---|---|---|
| 1 | $117,059.38 | $17,065.61 | $1,662,934.39 |
| 2 | $115,825.70 | $18,299.28 | $1,644,635.12 |
| 3 | $114,502.85 | $19,622.14 | $1,625,012.98 |
| 4 | $113,084.36 | $21,040.62 | $1,603,972.36 |
| 5 | $111,563.33 | $22,561.65 | $1,581,410.71 |
| 6 | $109,932.35 | $24,192.63 | $1,557,218.08 |
| 7 | $108,183.46 | $25,941.52 | $1,531,276.56 |
| 8 | $106,308.15 | $27,816.83 | $1,503,459.72 |
| 9 | $104,297.27 | $29,827.72 | $1,473,632.01 |
| 10 | $102,141.02 | $31,983.96 | $1,441,648.04 |
| 11 | $99,828.90 | $34,296.09 | $1,407,351.95 |
| 12 | $97,349.63 | $36,775.35 | $1,370,576.60 |
| 13 | $94,691.14 | $39,433.85 | $1,331,142.75 |
| 14 | $91,840.46 | $42,284.52 | $1,288,858.23 |
| 15 | $88,783.71 | $45,341.28 | $1,243,516.95 |
| 16 | $85,505.98 | $48,619.00 | $1,194,897.95 |
| 17 | $81,991.31 | $52,133.67 | $1,142,764.28 |
| 18 | $78,222.56 | $55,902.42 | $1,086,861.86 |
| 19 | $74,181.37 | $59,943.61 | $1,026,918.25 |
| 20 | $69,848.05 | $64,276.94 | $962,641.32 |
| 21 | $65,201.46 | $68,923.52 | $893,717.79 |
| 22 | $60,218.97 | $73,906.01 | $819,811.78 |
| 23 | $54,876.30 | $79,248.68 | $740,563.10 |
| 24 | $49,147.41 | $84,977.57 | $655,585.53 |
| 25 | $43,004.37 | $91,120.61 | $564,464.92 |
| 26 | $36,417.26 | $97,707.73 | $466,757.19 |
| 27 | $29,353.96 | $104,771.03 | $361,986.17 |
| 28 | $21,780.05 | $112,344.93 | $249,641.23 |
| 29 | $13,658.63 | $120,466.36 | $129,174.88 |
| 30 | $4,950.10 | $129,174.88 | $0.00 |
Results
Annual Cash Flow
$20,163
About $1,680.25 per month after every expense and the mortgage.
6.43%
In line with most rental markets
2.75%
Low — the deal is close to break-even
$154,288
$734,000
Down payment plus closing costs and the repair budget.
1.15x
Thin coverage — little margin for error
$11,177
70.00%
—
Price ÷ gross annual rent.
15.41%
84.50%
1000.00%
Over the 10-year hold including the sale.
2.39x
Total distributions ÷ cash invested.
138.52%
$1,016,705
Cash flow plus sale proceeds, less the cash invested.
Live results update as you type — currently showing annual cash flow of $20,163. Replace the defaults with your own rent roll, tax bill and insurance quote for an exact comparison.
Visualizations
Annual Cash Flow Over the Hold
Where the Effective Income Goes
Equity Buildup Over the Hold
Cap Rate
Formula
The capitalisation rate is the unlevered, first-year yield of the income stream. Re-arranged, it prices any property: divide your NOI by the cap rate the market pays for that asset type.
Alternative Form
Variables
| Symbol | Name | Unit | Description |
|---|---|---|---|
| NOI | NOI | $/yr | Income after operating expenses, before debt |
| V | Value | $ | Price paid or current market value |
| R | Cap rate | % | Market yield for comparable properties |
Explanation
Office underwriting lives and dies on the lease stack: term, escalations, tenant credit and who carries expenses. Post-2020, also model downtime and concession risk explicitly.
Derivation
Cap rate is the reciprocal of the income multiple: a 5% cap is a 20× multiple of NOI. It excludes financing, so it measures the property, not your deal structure.
Step-by-Step Calculation
Follow each step to understand how the result is calculated from your inputs.
Size the loan from the purchase price and the down payment.
Amortise the loan to find the monthly payment and annual debt service.
Annualise the rent and deduct vacancy and credit loss.
Subtract every operating expense to reach net operating income.
Compute cash flow, cash-on-cash and cap rate from the figures above.
Worked Examples
See how the calculator works with different scenarios.
Scenario
The office property calculator run on the values above, showing the full calculation path rather than only the answer.
Inputs
Calculation
1. Size the loan from the purchase price and the down payment. → $1,680,000 loan, $720,000 down 2. Amortise the loan to find the monthly payment and annual debt service. → $11,177.08/month ($134,125/year) 3. Annualise the rent and deduct vacancy and credit loss. → $182,400 effective gross income 4. Subtract every operating expense to reach net operating income. → $154,288 NOI 5. Compute cash flow, cash-on-cash and cap rate from the figures above. → $20,163 cash flow, 2.75% return on cash
Result
Annual Cash Flow: $20,163
Interpretation
NOI $154,288 on $2,400,000 (6.43% cap); debt $134,125 leaves $20,163 of annual cash flow and 2.75% on $734,000 invested. DSCR 1.15x. Projected 1000.00% IRR over a 10-year hold.
Understanding Your Result
Your Result: Annual Cash Flow: $20,163
Typical range: A rental that clears $734,000 of cash typically targets a 5–8% cap rate and an 8%+ cash-on-cash return; this one models at 6.43% and 2.75%.
What This Means
Office underwriting lives and dies on the lease stack: term, escalations, tenant credit and who carries expenses. Post-2020, also model downtime and concession risk explicitly.
Why It Matters
NOI $154,288 on $2,400,000 (6.43% cap); debt $134,125 leaves $20,163 of annual cash flow and 2.75% on $734,000 invested. DSCR 1.15x. Projected 1000.00% IRR over a 10-year hold.
Professional Interpretation
NOI $154,288 on $2,400,000 (6.43% cap); debt $134,125 leaves $20,163 of annual cash flow and 2.75% on $734,000 invested. DSCR 1.15x. Projected 1000.00% IRR over a 10-year hold.
How this is calculated
The capitalisation rate is the unlevered, first-year yield of the income stream. Re-arranged, it prices any property: divide your NOI by the cap rate the market pays for that asset type.
What drives the result
The pro-forma method: annualise the rent, deduct vacancy to reach effective gross income, subtract operating expenses to reach net operating income, then subtract debt service to reach cash flow. Each layer answers a different question — value (cap rate), lender safety (DSCR) and investor return (cash-on-cash).
Recommendations
- •Stress the rent 5% lower and vacancy 5% higher; if the deal still pays, it will survive a soft year.
- •Value the property on NOI, not on the listing price or the tax assessment.
- •Get an insurance quote and a current tax assessment before trusting the cash flow — both often rise after purchase.
Educational Content
Introduction
Rental analysis starts with one year of operations: scheduled rent, vacancy and credit loss, every operating expense, and the debt payment. NOI is what remains for the owner; everything else — cap rate, cash flow, DSCR, cash-on-cash — is NOI viewed from a different angle.
Concept Explanation
The pro-forma method: annualise the rent, deduct vacancy to reach effective gross income, subtract operating expenses to reach net operating income, then subtract debt service to reach cash flow. Each layer answers a different question — value (cap rate), lender safety (DSCR) and investor return (cash-on-cash).
Applications
Benefits
- •One consistent model across every property, so comparisons are fair
- •Forces every expense to be named and budgeted rather than ignored
- •Separates the property’s performance from the financing around it
Limitations
- •A one-year pro-forma cannot capture capital expenditures that arrive in lumps — roofs, systems and exteriors need their own reserve
- •Actual vacancy and expense ratios vary by market and management quality; a single assumption hides that spread
- •The model assumes the rent roll is at market; in-place rents below market flatter the deal
Best Practices
- •Build the pro-forma from your own quotes — insurance, taxes and management — not the seller’s summary
- •Stress the deal: rent down 5%, vacancy up 5% — if it still pays, it will survive a soft year
- •Fund a capital-expenditure reserve of about 5% of rent before calling any cash flow "positive"
Common Misconceptions
Practical Tips
- •Pull the market cap rate from recent sales of the same property type in the same submarket
- •Use the cap-rate valuation (NOI ÷ market cap) to set offers independently of the asking price
Common Mistakes
Assumptions
This calculator makes the following assumptions to provide estimates:
Limitations
Be aware of these limitations when using this calculator:
Frequently Asked Questions
Answers to common questions about this calculator.
What should I watch when buying office?
Who uses the office property calculator?
How accurate is the office property calculator?
Do I need to sign up or pay to use this calculator?
Can I use these numbers in a formal valuation or loan application?
How do I choose realistic inputs?
Related Calculators
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Related Guides
Deepen your understanding with these educational resources.
How the pro-forma layers build from rent to cash flow, and where deals usually hide problems.
Which metric answers which question, and why none of them should be read alone.
Down payments, rate premiums and how lenders size income-property loans.
Glossary
Technical terms used in mortgage calculations explained in plain language.
- Net Operating Income (NOI)
- Effective gross income minus operating expenses, before debt service and income tax. The core measure of a property’s earning power.
- Capitalisation Rate
- NOI divided by price or value — the unlevered yield the income stream offers at today’s price.
- Pro-Forma
- A forward-looking operating statement projecting income and expenses, as opposed to the historical statement.
Authoritative References
Trusted sources and standards referenced by this calculator.
Applicable Standards
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Page Information
2026-09-21
2.0.0
Free to use for educational and professional purposes.