How to read this result
In the default example, effective gross income is $585,000.00. Results describe this input scenario; they are not a recommendation.
Change one assumption at a time to see how it affects the scenario. Compare periods and cost definitions consistently. Negative results show a modeled shortfall; an unavailable ratio needs a valid denominator.
Formula and methodology
Reduce annual gross rent and other income by the entered vacancy allowance. Subtract operating expenses to find storage NOI, then divide by the selected cap rate.
Enter percentages as whole numbers: 5 means 5%. When used as a factor, the calculation divides a percentage by 100. Percentage outputs multiply the final ratio by 100. Calculations retain precision internally; displayed amounts and rates are rounded to two decimals.
Variables and input definitions
- Annual gross unit rent (USD/year)
- Potential annual unit rent. Minimum: 0.
- Annual ancillary income (USD/year)
- Insurance/admin/retail or other facility income. Minimum: 0.
- Vacancy rate (%)
- Economic/physical vacancy assumption. Minimum: 0. Maximum: 100.
- Annual operating expenses (USD/year)
- Facility operating expenses. Minimum: 0.
- Cap rate (%)
- User-entered cap rate. Minimum: 0.01. Maximum: 100.
Worked example
This example uses the exact prefilled inputs above. Reset defaults to restore this scenario after making changes.
| Item | Default scenario |
|---|---|
| Annual gross unit rent | $600,000.00 |
| Annual ancillary income | $50,000.00 |
| Vacancy rate | 10.00% |
| Annual operating expenses | $220,000.00 |
| Cap rate | 6.50% |
| Item | Default scenario |
|---|---|
| Effective gross income | $585,000.00 |
| NOI | $365,000.00 |
| Indicated value | $5,615,384.62 |
Assumptions and limitations
Facility-specific rent mix, concessions, management normalization and market cap rates require professional judgment.
Results describe this input scenario; they are not a recommendation.
The tool uses values you supply. It does not retrieve market prices, verify leases or inspect a property. Results exclude items outside the listed inputs. Review local requirements and the relevant contract when a payment, fee or allocation depends on them.
Common mistakes
Physical unit vacancy and revenue loss may differ when unit sizes and rents vary. Consolidate income consistently rather than applying a vacancy allowance twice.
Sources and method references
These references provide context for the method and terminology. They do not endorse this tool or validate your property assumptions.
- Office of the Comptroller of the Currency — Comptroller's Handbook — Commercial Real Estate LendingNOI, direct capitalization, cap-rate valuation and DCF concepts for commercial real estate.
- Appraisal Institute — Basic Formulas — Income CapitalizationIncome/cap-rate/value relationships, gross income multiplier and debt-coverage formula references.
Frequently asked questions
Does the calculator use live storage rental rates?
No. Annual income, expense and capitalization assumptions are entered by the user.
Is this the same as the storage investment model?
This tool focuses on income-based value. The investment calculator additionally models units, average rents, debt service and invested cash.