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Enter income, expenses, and property value to calculate the capitalization rate. Best for evaluating and comparing properties.
Income
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Annual Operating Expenses
Expense entry mode
All fields are annual figures. Simple total field is not applied.
Often 6–10% of gross rents for residential
Property Value
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Return on acquisition cost. Use when evaluating a deal before buying.
Acquisition cost only — no financing
Today's estimated value — use for refi or comparison
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Cap rate estimates a property's unlevered income yield by comparing annual Net Operating Income with property value. It is commonly used to compare income-producing properties before financing, taxes, appreciation, and investor-specific assumptions are added.
This calculator supports cap rate, implied property value, and required NOI workflows. Results are intended for screening and underwriting support, not as a standalone investment decision or formal valuation.
Ohio Cap Rate Calculator: What Investors Need to Know
This calculator estimates cap rate — the ratio of Net Operating Income to property value — for Ohio investment properties. Ohio has a 2.75% flat state income tax, which improves after-tax returns, but property taxes run ~2% for investment property (no homestead exemption), and insurance averages $2,100/yr due to hail, wind, and flood risk. These expenses directly reduce NOI and compress cap rates.
The calculator pre-fills Ohio defaults: 8% vacancy, $1,400 insurance, and auto-calculates property tax at 2% of purchase price when you enter a value. Three modes are available: estimate cap rate from NOI, find implied value at a target cap rate, or determine the NOI needed to justify an asking price.
Cap rate measures unlevered yield only. It does not include mortgage payments, appreciation, or tax benefits. For full deal analysis, pair cap rate with DSCR, cash-on-cash return, and the Ohio Rental Property Calculator.
Ohio-Specific Factors That Affect Cap Rate
Property Tax (~2% for Investment Property)
Ohio has a 2.75% flat state income tax but has moderate property taxes. The effective rate per Tax Foundation is 1.36% statewide, varying by county from 0.9% to 2.17%. On a $225K property, that is roughly $3,400/yr — a significant NOI drag.
Insurance ($2,100/yr Average)
Ohio ranks below the national average for insurance costs for property insurance due to hail, tornado, and coastal hurricane risk. The Ohio Department of Insurance reports average premiums of $3,291 (2024). Coastal properties near Cleveland or Corpus Christi may need separate windstorm coverage through standard windstorm, adding $700-$2,500/yr.
Vacancy (8% Statewide Average)
FRED data shows Ohio rental vacancy at 11% (Jan 2025), elevated by new multifamily supply in Cincinnati, DFW, and Cleveland. For SFR underwriting, 8% is a conservative baseline. Cincinnati and DFW run 4-6%, Cleveland 6-8%, rural areas can reach 10-12%.
No State Income Tax
Cap rate itself is a pre-tax metric, so the no-income-tax advantage does not change the cap rate number. However, it improves your after-tax cash flow compared to investing in California (13.3%) or New York (8.8%). This is a hold-period benefit, not a cap rate benefit.
No Transfer Tax
Ohio does not charge a real estate transfer tax. This lowers acquisition costs by $1,000-$5,000 compared to states like Florida ($0.70/$100) or New York (0.4%-2.9%). Lower acquisition cost does not change cap rate, but it reduces your total cash invested and improves cash-on-cash return.
Ohio Cap Rate Benchmarks by Metro (2026)
These ranges reflect SFR and small multifamily (2-4 units) based on Zillow, Redfin, and Ohio REALTORS data. Actual cap rates depend on property condition, location within the metro, and expense assumptions.
| Metro | Median Price | Median Rent | Cap Rate Range | Insurance Avg |
|---|---|---|---|---|
| Cincinnati-Round Rock | $440K | $1,750/mo | 4.0-5.5% | $3,100 |
| Dayton-Kettering | $410K | $1,850/mo | 5.0-6.5% | $3,400 |
| Cleveland | $350K | $1,600/mo | 5.5-7.0% | $3,800 |
| Columbus | $260K | $1,400/mo | 6.0-7.5% | $2,800 |
Sources: Zillow ZHVI/ZORI, Redfin median sale data, Ohio REALTORS Market Statistics (Q2 2026). Cap rates modeled with 8% vacancy, 9% PM, 1% maintenance.
Worked Example: Cleveland Fourplex ($520K)
A 4-unit property in Cleveland's Third Ward, listed at $520,000. Each unit rents for $1,400/mo. Here is the full NOI breakdown using Ohio defaults.
| Gross Rental Income | $67,200/yr | $1,400 × 4 × 12 |
| Vacancy (8%) | -$5,376 | TX avg |
| Effective Gross Income | $61,824 | |
| Property Tax (2%) | -$10,400 | $520K × 2% |
| Insurance | -$5,200 | 4-unit higher than SFR |
| Property Management (9%) | -$5,564 | 9% of EGI |
| Maintenance (1%) | -$5,200 | $520K × 1% |
| Total Expenses | -$26,364 | |
| NOI | $35,460 | |
| Cap Rate | 6.82% | $35,460 / $520,000 |
A 6.82% cap rate in Cleveland falls in the upper half of the metro range. The fourplex format helps because rent scales faster than expenses — insurance and tax are per-property, not per-unit. For comparison, a single $520K SFR in Cincinnati renting at $2,400/mo would cap at roughly 3.8%.
Worked Example: Columbus SFR ($285K)
A 3BR/2BA single-family in Columbus's Southside, listed at $285,000 with market rent of $1,800/mo.
| Gross Rental Income | $21,600/yr | $1,800 × 12 |
| Vacancy (8%) | -$1,728 | |
| EGI | $19,872 | |
| Property Tax (2%) | -$5,700 | |
| Insurance | -$2,800 | SA lower than Cleveland |
| PM (9%) + Maint (1%) | -$4,639 | |
| Cap Rate | 6.53% | NOI $6,733 / $285K |
Columbus offers the best rent-to-price ratio among major Ohio metros. At $1,800 rent on $285K (0.63% monthly ratio), it clears the floor for positive cash flow with conventional financing. Compare this with Cincinnati where the same $285K buys a property renting for $1,200-$1,400 — yielding a cap rate below 4%.
Ohio Cap Rate FAQ
What is a good cap rate in Ohio for 2026?
How does Ohio property tax affect cap rate?
Why are Cincinnati cap rates lower than Cleveland?
Does Ohio no-income-tax benefit show up in cap rate?
Should I budget for flood insurance in Ohio cap rate analysis?
What vacancy rate should I use for Ohio cap rate?
How do I compare cap rates between Ohio metros?
Sources
- Tax Foundation — Ohio effective property tax rates (taxfoundation.org)
- Ohio Department of Insurance — Insurance premium data (insurance.ohio.gov)
- Federal Reserve FRED — Ohio rental vacancy rate (fred.stlouisfed.org)
- Zillow Research — ZHVI and ZORI median values by metro
- Ohio REALTORS — Market Statistics Q2 2026