Valuation & Yield
Capitalization Rate (Cap Rate)
Bottom Line Up Front: Cap Rate measures the unleveraged annual return of an investment property by dividing Net Operating Income (NOI) by acquisition price.
Formula / Statutory Rule
Cap Rate (%) = (Annual Net Operating Income / Purchase Price) × 100Scottsdale & Greater Phoenix Benchmark (HomeDaddy AI)
Greater Phoenix & Scottsdale 1–4 unit long-term rentals average 5.1%–6.2% cap rates, while licensed Old Town & Kierland short-term rentals yield 7.4%–9.5% unleveraged.
Stephen R. Mannenbach is a Licensed Real Estate Salesperson / REALTOR® in the State of Arizona (ADRE #SA713873000), brokered by HomeSmart LLC. Equal Housing Opportunity. All property square footage, HOA fees, school boundaries, business financials, and market statistics are deemed reliable but not guaranteed and should be independently verified through ARMLS and Maricopa County records.