Cap rate and cash flow calculator
Net operating income, cap rate, cash flow, cash-on-cash return and debt coverage for a rental.
Taxes, insurance, utilities you pay, repairs, management. Not mortgage payments.
Cap rate
5.67%
Net operating income / year
$48,168
Gross rent multiplier
11.4
Cash flow after mortgage / year
$4,968
Cash-on-cash return
2.92%
Debt service coverage ratio
1.11
Many lenders look for a debt service coverage ratio of about 1.2 or more on rental property; requirements vary.
The four numbers that describe a rental
- Net operating income (NOI): rent after vacancy, minus operating expenses. Mortgage payments are not operating expenses.
- Cap rate: NOI divided by value. It compares properties regardless of how they're financed.
- Cash-on-cash return: cash flow after the mortgage, divided by the cash you put in.
- Debt service coverage ratio (DSCR): NOI divided by annual mortgage payments. Lenders use it to size loans on rental property.
Your real operating expenses are the ones on your operating statement. Propvara builds that statement from your actual bills, so these numbers stop being estimates. See operating statements.
What's a good cap rate?
It depends on the market, building type and interest rates. Compare against recent sales of similar buildings in the same area rather than a rule of thumb.
More tools: Canadian mortgage payment calculator · Rent increase calculator by province · Co-owner cost split calculator
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