Cap Rate Calculator Hamilton
A $400,000 purchase at $1,656 a month is a 2.69% cap after 3.6% vacancy.
Use in-place rent unless the unit is vacant and you can legally reprice it.
CMHC October 2025 Hamilton CMA. Condo vacancy stayed well below purpose-built. Last verified October 1, 2025.
Hamilton's combined residential rate is about 1.50% — nearly double Toronto's. That is the line that moves NOI here, not the rent.
Leave at 0 if you self-manage. 8% is a typical third-party fee.
Cap rate
2.69%
Gross yield
4.97%
Expense ratio
43.8%
Cap rate is $10,775 of NOI on a $400,000 price. It does not include mortgage payments, land transfer tax, or closing costs. 2.1% guideline, vacancy decontrol on most post-2018 units.
Hamilton looks cheap next to Toronto until the tax bill. A 1.50% mill rate on a $400,000 building takes more NOI than Toronto's 0.77% on $650,000 takes, and the sitting two-bedroom rent is $1,656, not $2,034. The cap rate is the rent you collect after that tax, not the entry price.
A $400,000 purchase rented at $1,656 a month, with 3.6% vacancy, produces $10,775 of NOI — a 2.69% cap rate. Vacancy last verified October 1, 2025.
How the Hamilton cap rate is built
Gross rent $19,872, minus $715 of vacancy, minus $8,382 of operating costs, leaves $10,775 of NOI. Divide by $400,000.
- The $1,656 rent is CMHC's October 2025 purpose-built two-bedroom average for the Hamilton CMA, up 1.6%. Condo two-bedrooms averaged $2,831.
- Purpose-built supply barely grew in 2025. The empty units came from student demand falling and from condos competing for the same tenants.
- A 1,337-unit construction pipeline in Q3 2025 is future vacancy risk, not this year's rent roll.
Vacancy in Hamilton CMA
Hamilton CMA purpose-built vacancy rose to 3.6% in 2025, the highest since the pandemic. CMHC blamed international-student outflows and more rented condos. West End and Mountain (McMaster, Mohawk) ran hotter. Downtown purpose-built competed with a wave of condo completions.
2.1% guideline, vacancy decontrol on most post-2018 units
Ontario's 2026 rent increase guideline is 2.1% for units that are covered. Units first occupied after 15 November 2018 are exempt. Hamilton's cheaper purpose-built sitting rent does not mean cheaper strata — CMHC's condo two-bedroom average was $2,831.
Hamilton cap rate FAQs
What is a typical cap rate in Hamilton?
On a $400,000 Hamilton CMA two-bedroom rented at $1,656 a month, with 3.6% vacancy, the cap rate is 2.69%. That is $10,775 of NOI. Change the rent to the amount on the actual rent roll.
How is cap rate calculated in Hamilton?
Cap rate is NOI divided by purchase price. In Hamilton, NOI starts with the Hamilton CMA two-bedroom sitting rent, minus 3.6% vacancy, property tax, insurance, and maintenance. The mortgage and land transfer tax are not in the number.
Is there rent control in Hamilton?
Ontario's 2026 rent increase guideline is 2.1% for units that are covered. Units first occupied after 15 November 2018 are exempt. Hamilton's cheaper purpose-built sitting rent does not mean cheaper strata — CMHC's condo two-bedroom average was $2,831.
What vacancy rate should I use in Hamilton?
Hamilton CMA purpose-built vacancy rose to 3.6% in 2025, the highest since the pandemic. CMHC blamed international-student outflows and more rented condos. West End and Mountain (McMaster, Mohawk) ran hotter. Downtown purpose-built competed with a wave of condo completions.
Does the Hamilton cap rate include land transfer tax?
No. Cap rate is unlevered operating income over price. Hamilton land transfer tax or registration fees are cash on closing and belong in cash-on-cash, not here.
Other Ontario cities
Sources
- CMHC 2025 Rental Market Report (Hamilton CMA vacancy 3.6%, 2-bed rent $1,656)Hamilton, last verified October 1, 2025
- Ontario: 2026 rent increase guideline is 2.1%Hamilton, last verified October 1, 2025
This calculator is an estimate for planning. Cap rate turns on the rent you can legally collect, empty months, and the tax bill — none of which a national average replaces. Confirm against the rent roll and the latest assessment notice.
Comparing provinces before you buy?
The national cap rate calculator ranks every province on the same price and on a typical local deal. When you are ready, get matched with a Hamilton agent who has closed investment purchases in this market.