Property Value Calculator
Capitalise net income at a market yield to estimate what a commercial property is worth. The same maths valuers call the income capitalisation approach.
Checking a price against its income instead? Use the Property Yield Calculator.
How income capitalisation works
value = net annual income ÷ (yield ÷ 100)
The yield you choose does the heavy lifting: at $100,000 income, 5% implies $2.0m but 6% implies $1.67m. Small yield movements shift value a lot, which is why comparable sales evidence matters more than the arithmetic.
Frequently asked questions
What is the income capitalisation method?
A valuation approach that divides a property's sustainable net income by a market-derived yield. It is the standard first-pass method for income-producing commercial property.
Where do I get the right yield to use?
From recent sales of comparable properties: same asset class, similar location, lease profile and tenant strength. Agents' campaign results and valuer reports are the usual sources.
Is this a substitute for a valuation?
No. A formal valuation adjusts for vacancies, incentives, capital works, lease terms and much more. This gives you the headline arithmetic for a quick sanity check.
Should I use gross or net income?
Net. Value follows the income the owner actually keeps after non-recoverable outgoings.
Related calculators
Know the market before you negotiate
Every calculation here ends in a negotiation. MarketBuddy gives you the market side: rents, listings and trends across 100,000+ Australian commercial properties.
The calculators on this site are provided for general information only. Results are estimates, do not account for the terms of any specific lease, loan or property, and do not constitute financial, legal or valuation advice.