Estimate an income-based duplex value
Enter the combined rent for both units, a vacancy allowance, annual operating expenses, a market cap rate, and a market gross rent multiplier. The calculator compares two common income-based indications of value.
This educational calculator does not retrieve comparable sales, verify leases or expenses, select an appropriate cap rate or GRM, inspect the property, or produce an appraisal. The person using it is responsible for the assumptions entered.
What the calculator is measuring
Capitalization-rate indication
The capitalization approach begins with estimated net operating income, or NOI. The simplified formula used here is:
Mortgage payments, depreciation, and income taxes are not included in NOI. Operating expenses normally focus on costs required to operate the property, such as taxes, insurance, management, repairs, owner-paid utilities, and reserves.
Gross-rent-multiplier indication
GRM is a faster screening method that compares a property price with gross monthly rent.
Because GRM does not directly deduct operating expenses, two properties with the same rent can deserve different values when their expenses, condition, and utility arrangements differ.
Worked duplex example
$4,200 combined monthly rent
At 5% vacancy, $16,800 in annual operating expenses, and a 6% cap rate, the example produces $31,080 in estimated NOI and a cap-rate indication of $518,000. A market GRM of 140 produces a second indication of $588,000. That spread is a prompt to investigate comparable sales, expenses, condition, and the assumptions—not a promise that the property will sell inside the range.
How to choose the inputs
- Rent: use actual current rents, then separately evaluate credible market-rent potential.
- Vacancy: use evidence that reflects the property’s market and tenant profile.
- Expenses: include recurring ownership costs and realistic reserves.
- Cap rate and GRM: derive these from recent, relevant duplex sales whenever possible.
Continue with how rental income affects duplex value and how to select duplex comparable sales.