§ Calculator · Investment

Investment property

What this is

Cap rate, cash flow, and cash-on-cash return on a rental property.

Cap rate = NOI ÷ price (independent of financing). Cash-on-cash = annual cash flow ÷ cash invested (sensitive to leverage). Healthy Canadian rental targets: cap rate 5%+, cash-on-cash 8%+ after expenses.

·Rule of thumb: monthly rent should be at least 1% of purchase price (1% rule). Most Canadian markets are far below this now.
·Vacancy: default 5% (one month every two years). Use 8-10% in high-turnover student rental markets.

Purchase priceDown payment

Mortgage rate (%)Amortization (yr)Monthly rentVacancy rate

Property tax (yr)Insurance (yr)Maintenance (% of price/yr)

Management

Monthly cash flow

-$748

Cap rate

3.77%

Cash-on-cash

-8.16%

Annual NOI

$20,762

Down payment

$110,000

Mortgage / month

$2,478

Monthly cash flow: rent vs expenses

$2K

$1K

Mortgage: $2KTax + insurance + maint + mgmt: $1KCash flow: $0

Annual NOI vs invested cash

Investment property mortgages require 20%+ down (not eligible for CMHC). Rental income counted at 50-80% by lenders for qualifying. Capital gain on sale fully taxable (no PRE).

Disclaimer

Educational, not financial advice. Output is generated by an AI assistant using simplified assumptions. Tax rates, contribution limits, and benefit amounts change annually; confirm with a CFP, CPA, or the relevant Canadian regulator (CRA, FSRA, OSC, IIROC) before acting.