For landlords and investors

    Rental Property ROI Calculator

    Estimate monthly cash flow, cap rate, and cash-on-cash return on a rental, so you can compare properties on the numbers instead of the listing photos.

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    Expenses are operating costs (taxes, insurance, maintenance, management), not the mortgage.

    Enter the price and monthly rent to see the returns.

    Estimate only, not financial advice. Cap rate uses net operating income before financing. Cash-on-cash uses your down payment as the cash invested; add closing and renovation costs for a fuller picture.

    The three numbers that matter

    A rental either makes sense on the numbers or it does not, and three figures tell most of the story. Monthly cash flow is what lands in your account after the mortgage and operating costs. Cap rate is net operating income over the purchase price, which lets you compare properties regardless of financing. Cash-on-cash return measures the cash flow against the actual money you put in, which is the return your down payment is earning.

    Why financing sits outside the cap rate

    Cap rate deliberately ignores the mortgage. Two investors can buy the same building with very different down payments and rates, so financing tells you about the deal structure, not the property. By comparing cap rates you compare the properties themselves. Then cash-on-cash and cash flow bring your specific financing back into the picture.

    Run it honestly, then keep the record

    The fastest way to talk yourself into a bad deal is to assume full occupancy and no repairs. Build in vacancy and a maintenance reserve, and the cash flow gets more honest. Once you own the property, the same discipline pays off: tracking rent, maintenance, and costs in one place is what turns a guess into a real return you can measure year over year. For the deductible side of those costs, see our guide to rental property tax deductions in Canada.

    Frequently asked questions

    What is a good cap rate on a rental property?

    It depends on the market and the risk. In many Canadian cities cap rates on residential rentals run in the low-to-mid single digits, and lower-risk properties in strong locations often trade at lower cap rates. Use cap rate to compare properties on a consistent basis rather than as a single pass-or-fail number.

    What is the difference between cap rate and cash-on-cash return?

    Cap rate is net operating income divided by the purchase price, ignoring how the deal is financed. Cash-on-cash return is your annual cash flow after the mortgage, divided by the actual cash you put in. Cap rate compares properties; cash-on-cash measures the return on your money.

    What counts as operating expenses?

    Operating expenses are the ongoing costs of running the property: property taxes, insurance, maintenance and repairs, property management, and any utilities or condo fees you pay. The mortgage is financing, not an operating expense, so it is excluded from net operating income and cap rate.

    Should I include vacancy and repairs?

    Yes, for a realistic picture. Experienced investors set aside an allowance for vacancy and for capital repairs even in months when nothing breaks. Building those into your monthly expenses gives a more honest cash flow than assuming full occupancy and no surprises.

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