Question 1

How do I calculate rental property cash flow in Canada?

Accepted Answer

To calculate rental property cash flow in Canada, subtract all monthly expenses (mortgage payment, property tax, insurance, maintenance, vacancy allowance, and property management fees) from your gross rental income. This calculator handles Canadian-specific costs including semi-annual compounding mortgages, CMHC insurance, and provincial land transfer tax.

Question 2

What is a good cap rate for rental property in Canada?

Accepted Answer

In Canada, cap rates typically range from 3% to 8% depending on the market. Major cities like Toronto and Vancouver tend to have lower cap rates (3–5%) due to higher property values, while smaller markets may offer 6–8%. Cap rate is calculated as Net Operating Income divided by the property purchase price.

Question 3

How does CMHC insurance affect my rental property investment?

Accepted Answer

If your down payment is less than 20% of the purchase price, CMHC mortgage insurance is required in Canada. Premiums range from 2.8% to 4.0% of the mortgage amount and are added to your mortgage balance, increasing your total borrowing cost. This calculator automatically factors in CMHC insurance based on your down payment percentage.

Question 4

What is a good cash-on-cash return for Canadian rental properties?

Accepted Answer

A good cash-on-cash return for Canadian rental properties is generally 6–12%. This metric measures your annual pre-tax cash flow divided by the total cash you invested (down payment, closing costs, and any renovation costs). Higher returns are possible in secondary markets, while major city investments may yield lower cash-on-cash but stronger appreciation.

Year	Property Gain	Alt. Gain (5.00%)	Winner
1	-$28,257	$1,448	Alt.
3	-$18,522	$4,563	Alt.
5	-$6,127	$7,998	Alt.
10	$37,552	$18,206	Property
15	$101,195	$31,235	Property
20	$187,510	$47,863	Property
25	$299,558	$69,085	Property

Rental Property Calculator

Key Metrics

Upfront Investment

Mortgage

Monthly Snapshot

Cash Flow Analysis

Equity vs Debt

Optimal Sale Window

Property vs. Alternative Investment