Investment Property Cash Flow Calculator
Calculate monthly cash flow, cap rate, and total return for any Toronto investment property. Enter the purchase details, financing, and operating expenses to see if the numbers work.
Property
Financing
Investment properties require minimum 20-25% down.
Investment property rates are typically 0.5-1% higher than owner-occupied.
Monthly expenses
Estimate: 0.66% of purchase price / 12.
5% is standard — roughly 3 weeks vacant per year.
8-10% of rent if you use a property manager. 0 if self-managing.
Monthly cash flow
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Cap rate
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Cash-on-cash return
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Monthly income and expenses
Understanding Toronto investment property returns
In most Toronto markets, residential investment properties produce negative or near-zero monthly cash flow. The investment thesis has historically been capital appreciation — property values in Toronto rose significantly over the 2010s, making leveraged real estate highly profitable even when monthly cash flow was negative. Whether that appreciation continues at the same pace is genuinely uncertain.
Cap rate vs cash-on-cash return
The cap rate is the ratio of net operating income (income minus expenses, before debt service) to purchase price. It measures the property's income-generating ability independent of financing. A Toronto condo typically yields a cap rate of 3-4%. The cash-on-cash return measures the annual cash flow as a percentage of the total cash invested (down payment plus closing costs) — this is the more relevant figure for a leveraged buyer.
What this calculator doesn't include
Income tax on rental income (your marginal rate applies to net rental income), capital gains tax on eventual sale (50% inclusion rate in Canada), depreciation (CCA deductions), one-time costs like renovations before listing, or the significant personal time involved in managing a rental property. Run these numbers with a real estate accountant before buying.