Investment Property ROI Calculator Canada — Does It Cash Flow?
Before buying a Canadian rental property, know your cap rate, monthly cash flow, and 10-year total return. This calculator runs the full income statement — rent, vacancy, property tax, insurance, maintenance, management — and tells you your break-even rent and real return.
What you'll need
- Purchase price and expected monthly rent
- Down payment percentage (minimum 20% for investment properties)
- Expected annual appreciation rate
How it works
Enter purchase price, monthly rent, and down payment
Investment properties in Canada require minimum 20% down — no CMHC available. Enter the rent you expect to receive before vacancy and expenses.
Set expected appreciation rate
We model 2%, 4%, or 6% annual appreciation. Canada's long-run national average is ~4%, but major city condos have underperformed in recent years.
See cap rate, cash flow, and 10-year return
We run a full income statement — rent, vacancy, property tax, insurance, maintenance, management — and show your cap rate, monthly cash flow, cash-on-cash return, and projected 10-year equity.
$750K Toronto Condo, 20% Down, $3,200/mo Rent — Full Analysis
| Metric | Value |
|---|---|
| Down payment (20%) | $150,000 |
| Monthly mortgage (5.49%, 25yr) | $3,285 |
| Gross rent | $3,200/mo |
| Less 5% vacancy | −$160/mo |
| Operating expenses (tax, ins, maint, mgmt) | −$960/mo |
| Net Operating Income (monthly) | $2,080 |
| Monthly cash flow (after mortgage) | −$1,205 |
| Cap rate | 3.3% |
| Break-even rent needed | $4,405/mo |
Most Toronto condos cash flow negatively at current prices and rates. The investment case rests on appreciation. Always stress-test with higher vacancy and maintenance.
Frequently asked questions
What is a good cap rate for rental property in Canada?
Cap rates in major Canadian cities are low compared to global markets. Toronto and Vancouver condos typically have cap rates of 2.5–4%, while single-family homes run 3–5%. Mid-size cities (Hamilton, London, Kitchener) offer 4–6%. Generally, a cap rate above the local financing rate (spread) indicates cash-flow potential, while below the rate means negative leverage.
Do investment properties cash flow in Canada?
Many Canadian rental properties do not cash flow positively after mortgage payments in high-price markets — investors often accept negative cash flow in anticipation of appreciation. In Toronto and Vancouver, negative cash flow of $500–$1,500/month is common. Properties in smaller cities (Winnipeg, Edmonton, Saskatoon) are more likely to cash flow positively due to higher rent-to-price ratios.
How is rental income taxed in Canada?
Rental income is taxed as ordinary income (not capital gains). You can deduct: mortgage interest (not principal), property taxes, insurance, maintenance, management fees, legal fees, depreciation (CCA). Consult a tax accountant about claiming CCA — it defers tax but can trigger recapture when you sell. The principal residence exemption does NOT apply to rental properties.
What is the minimum down payment for an investment property in Canada?
In Canada, CMHC mortgage insurance is NOT available for rental or investment properties. This means investment properties require a minimum 20% down payment. There are no exceptions — even if you plan to occupy one unit in a multiplex, the rental units affect qualification. Non-owner-occupied properties face stricter underwriting criteria at most lenders.
Know the real return before you commit to Canadian rental real estate.
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