Rental Property Calculator Canada — Does the Deal Cash Flow?
Most Canadian rental properties are negative cash flow — investors rely on appreciation. But knowing your exact monthly deficit, cap rate, and cash-on-cash return before you buy is essential. Run the numbers with realistic vacancy rates, Canadian investor mortgage rates (20%+ down), and actual expense ratios.
What you'll need
- Purchase price and down payment (min 20%)
- Expected monthly rent
- Annual property tax estimate
- Vacancy rate for the area
How it works
Enter purchase price and down payment (min 20%)
Investment properties in Canada require at least 20% down — no CMHC insurance available. We calculate your mortgage at investor rates.
Enter expected rent and property tax
We apply a standard 30% expense ratio (insurance, maintenance, management) plus your specific property tax and vacancy rate.
See cap rate, cash flow, and cash-on-cash return
Three metrics every Canadian investor needs: gross yield, net operating income (cap rate), and actual after-mortgage cash-on-cash return.
Rental Property Analysis: $750,000 Property, $150K Down, $3,000/mo Rent
| Metric | Value |
|---|---|
| Gross annual rent | $36,000 |
| Net operating income | $22,680 |
| Cap rate | 3.02% |
| Monthly mortgage payment | $3,282 |
| Monthly cash flow | −$394 |
| Cash-on-cash return | −3.14% |
Negative cash flow is common in Toronto and Vancouver. Investors rely on appreciation. Calgary and Edmonton often show positive cash flow.
Frequently asked questions
What is a good cap rate for a rental property in Canada?
In high-priced markets like Toronto and Vancouver, cap rates are often 2–4% due to elevated purchase prices. In Calgary, Edmonton, and smaller cities, cap rates of 4–6% are achievable. A cap rate below the mortgage rate means negative leverage — you're relying on appreciation, not cash flow.
What is the minimum down payment for an investment property in Canada?
Investment (non-owner-occupied) properties require a minimum 20% down payment in Canada. CMHC mortgage insurance is not available for investment properties. Some lenders prefer 25%+ for better rates on investment mortgages.
Is rental income taxable in Canada?
Yes. Net rental income (rent minus allowable expenses) is taxed as ordinary income at your marginal rate. Allowable expenses include mortgage interest (not principal), property tax, insurance, repairs, property management, and depreciation (CCA). Keep detailed records.
What expenses can I deduct from rental income in Canada?
Deductible rental expenses in Canada include: mortgage interest (not principal), property taxes, insurance, maintenance and repairs, property management fees, advertising, legal and accounting fees, and capital cost allowance (CCA/depreciation). You cannot deduct the capital portion of mortgage payments.
Know your numbers before you make an offer.
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