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Explore your assumptions
Use your own figures. There are no prefilled market rates or valuation multiples.
Complete the inputs to see your scenario.
—The result updates as you change the values.
Calculations stay in your browser. Inputs are not submitted or saved. This tool provides arithmetic, not a valuation, loan quote, clinical staffing plan, or approval.
Key takeaways
- The value formula is annual NOI ÷ capitalization rate expressed as a decimal.
- Use the same property and expense scope for NOI and the cap-rate evidence.
- Per-bed and per-unit figures are different ratios and must be labeled.
Read the formula
Illustrative value = annual NOI ÷ (cap rate ÷ 100). The second result divides that value by the capacity you enter. This makes the chosen assumptions visible; it does not tell you whether the assumptions fit the property.
Define NOI before using it
State the accounting period, expense deductions, management treatment, replacement reserves, property taxes, insurance, and rent structure as applicable. Match that definition to the evidence supporting the cap rate. Comparing unlike expense bases can create a misleading valuation even when the arithmetic is correct.
| Input | Potential problem |
|---|---|
| Annual NOI | Deferred repairs or omitted operating expense |
| Cap rate | Evidence from a different asset, period or income definition |
| Capacity | Mixing beds, units, licensed capacity and occupied inventory |
An illustrative example
At arbitrary inputs of $80,000 NOI, an 8% cap rate, and 10 beds, the calculation is $1,000,000 and $100,000 per bed. This is a math demonstration, not a market benchmark or a statement about HUD eligibility for a facility of that size.
Keep property and operations connected
The result may reflect property or combined operating assumptions depending on how the income is defined. Do not add another value without reconciling those assumptions. HUD requires project-specific property and operator underwriting, rather than approving a price merely because it has a plausible ratio. (Source: HUD, 2026)
What market context can and cannot do
NIC's covered-market research can provide context, but a combined senior-housing statistic is not a property-specific cap rate, occupancy forecast, or per-bed comparable. Use evidence matched to the subject and its segment. (Source: NIC, 2026)
What should happen next?
Inspect the underlying income schedule, capital plan, property condition, license scope, and comparable evidence with the appropriate advisers. The calculation is one check in that process, not its conclusion.
Frequently asked questions
Does the calculator provide a market cap rate?
No. Enter a rate supported by appropriate evidence and professional analysis for the asset and income definition being evaluated.
Which bed count should I use?
Choose a clearly defined, relevant denominator and label it. Licensed beds, physical beds, available beds, and units may differ. The tool does not validate capacity.
Can I add the operating company value to this output?
Not automatically. First determine which operating and property economics the NOI and cap rate already represent. Avoid double counting.
Does a lower cap rate always mean a better investment?
A lower rate produces a higher value for the same NOI, but it does not establish quality or suitability. Risk, growth, condition, financing, and the evidence behind the rate still matter.
Sources
Sources are dated to distinguish current guidance from earlier publications. They support the identified facts; the transaction questions and examples are educational analysis.
- HUD: Office of Residential Care Facilities (2026). Retrieved September 5, 2026.
- NIC: Q2 2026 senior housing occupancy (2026). Retrieved September 5, 2026.