Rental Property Cash Flow Calculator
Analyze your rental property's monthly cash flow, net operating income, cap rate, and cash-on-cash return before you invest.
💰 Income
📋 Monthly Expenses
🏠 Property Info (for return metrics)
Understanding Rental Property Returns in Canada
Cash flow is the most immediate metric: what's left after all expenses including the mortgage? Negative cash flow means you're subsidizing the property each month — only justified if appreciation or other factors compensate.
Cap rate lets you compare properties regardless of financing. It tells you what the property returns based purely on its income and price — ignoring whether you're using a mortgage. A cap rate above the mortgage rate generally indicates positive leverage.
The 1% rule (popular in the US) rarely works in Canadian urban markets — a $700,000 Toronto condo earning 1% monthly rent would need $7,000/month, when typical rents are $2,500–$3,200. In Canada, appreciation has historically subsidized negative cash flow, but this carries risk. Always run the numbers on cash flow before counting on appreciation.
Frequently Asked Questions
5%–10% is considered solid. In high-cost markets like Toronto, 2%–4% is common due to high prices. Secondary cities like Hamilton, London, and Windsor often offer 6%–9%.
Yes. Net rental income (gross rent minus eligible expenses) is taxed at your marginal rate. Eligible deductions include mortgage interest, property tax, insurance, management fees, maintenance, and CCA. Report on form T776.
3%–5% is typical in urban Canadian markets. Toronto and Vancouver often show 2%–4%. Smaller cities offer 5%–7%. A cap rate above your mortgage rate indicates positive leverage.
Mortgage interest (not principal), property taxes, insurance, property management fees, maintenance, advertising, and Capital Cost Allowance (CCA). You cannot deduct your own labour or mortgage principal repayments.