Cap Rate Calculator
The standard yardstick for comparing rental properties: net operating income divided by purchase price, expressed as a percentage. Excludes financing so you can compare properties apples-to-apples.
Annual operating expenses
Cap rate
4.32%
NOI / purchase price (excludes financing)
Net operating income
$28,080/yr
Gross rent multiplier
16.9x
Effective gross income
$36,480/yr
Total op. expenses
$8,400/yr
Operating expenses are 23% of effective income. Most Canadian residential rentals run between 35%–50%. Cap rates above 5.3% on similar properties signal a better deal; below 3.3% may be overpriced.
Cap rate ignores mortgage costs and depreciation — use cash-on-cash return for leveraged comparisons. Strong markets often trade at lower cap rates due to expected appreciation.
The information presented on HousingPortal.ca is intended for general illustrative purposes only. While the information is believed to be reliable, it cannot be guaranteed for accuracy, completeness, or currency. Neither HousingPortal.ca and its employees, nor any other party identified in this guide/report, assumes any liability for the information provided. The views and opinions expressed by the analysts at HousingPortal.ca are their own and should not be considered as investment advice. It is recommended that you seek the advice of a licensed real estate professional before making any decisions regarding real estate investments.