Rental Property Cash Flow Calculator Canada
Rent in, every cost and the mortgage out. With September 2026 rates and each city's rents, vacancy, tax and condo fees.
Condo loads a $600 monthly fee. House drops the fee and adds a 5% capital reserve.
Price and rent
Add every unit's rent for a plex.
CMHC October 2025, Toronto CMA.
Financing
20% is the minimum on a rental you won't live in.
Preloaded at 4.5%: advertised 5-year fixed rates plus a typical rental premium.
Ontario and Toronto land transfer tax plus about $3,250 in legal, title and inspection.
Operating costs
Toronto's combined residential rate. The 905 is higher — Mississauga, Brampton, Hamilton, and Ottawa each have their own cap rate page with that city's mill rate loaded.
Toronto maintenance fees average about $0.75 per sq ft a month.
0 if you self-manage. 8% is a typical fee.
Roof, windows, furnace. A condo's reserve fund covers the building.
Utilities you pay, accounting, licensing.
Monthly cash flow
−$1,526
Cash-on-cash
−12.0%
Cap rate
2.50%
Debt coverage
0.47
Break-even rent
$4,359 a month
Your rent is $1,659 short.
Down payment to break even
63% down
About $405,785 of equity before the rent covers every cost.
At renewal
One point higher (5.50%): −$1,822 a month. Two points higher (6.50%): −$2,131 a month.
What cash flow leaves out
Year one pays down $11,588 of principal. Cash flow plus that paydown is −$6,729, or −4.42% on the cash you put in, before appreciation and income tax.
Estimate for planning, not financial advice. Cash flow is before income tax. Rent rules: 2.1% guideline, vacancy decontrol on most post-2018 units.
Cash flow is what the rental pays you after the mortgage. Pick a city and the calculator loads a typical two-bedroom purchase, the average asking rent, CMHC’s vacancy rate, the city’s property tax rate, its average condo fee and the land transfer tax on closing. Financing starts at the minimum 20% down and 4.50% over 25 years.
Two numbers go beyond a standard calculator: the break-even rent, the rent at which the deal stops costing you money, and the down payment to break even, how much equity you would need for the rent to cover every cost. On the preloads, that ranges from 40% to 70% down.
Rental property cash flow in 10 Canadian cities
Same method everywhere: a typical two-bedroom condo at the city’s average asking rent, CMHC purpose-built vacancy, the local tax rate and condo fee, 20% down at 4.50%. Winnipeg comes closest at −$346 a month; Mississauga is furthest behind at −$1,687. Open a city for its rent options, renewal scenarios and cash to close.
| City | Price | Asking rent | Cash flow / month | Break-even rent | Down to break even | Rent ÷ price |
|---|---|---|---|---|---|---|
| Winnipeg | $250,000 | $1,700 | −$346 | $2,075 | 46% | 0.68% |
| Montreal | $380,000 | $2,150 | −$400 | $2,584 | 40% | 0.57% |
| Edmonton | $280,000 | $1,600 | −$531 | $2,182 | 55% | 0.57% |
| Calgary | $350,000 | $1,850 | −$637 | $2,558 | 53% | 0.53% |
| Hamilton | $400,000 | $2,100 | −$962 | $3,153 | 64% | 0.53% |
| Ottawa | $450,000 | $2,350 | −$967 | $3,401 | 59% | 0.52% |
| Vancouver | $750,000 | $3,150 | −$1,165 | $4,426 | 49% | 0.42% |
| Brampton | $550,000 | $2,350 | −$1,420 | $3,894 | 67% | 0.43% |
| Toronto | $650,000 | $2,700 | −$1,526 | $4,359 | 63% | 0.42% |
| Mississauga | $620,000 | $2,450 | −$1,687 | $4,284 | 70% | 0.40% |
Mississauga and Brampton use Toronto CMA vacancy and CMHC rents with their own tax rates. Rent ÷ price is the monthly rent as a share of the purchase price, the ratio the 1% rule tests.
How to calculate rental property cash flow
Cash flow = rent − vacancy − operating expenses − mortgage payments − capital reserve. The first three give you net operating income (NOI), the number cap rate is built on. The mortgage is what turns NOI into cash flow. Here is the Calgary preload, step by step.
- 1
Add up a year of rent
$1,850 a month × 12 = $22,200 of gross rent.
- 2
Take off vacancy
CMHC put Calgary CMA purpose-built vacancy at 5%. That is $1,110 of rent you budget as never arriving.
- 3
Subtract operating expenses
Property tax, insurance, maintenance at 5% of rent and $450 a month in condo fees come to $10,137. Net operating income is $10,953, a 3.13% cap rate.
- 4
Subtract the mortgage
20% down leaves a $280,000 mortgage. At 4.50% over 25 years the payment is $1,550 a month, or $18,597 a year.
- 5
What is left is cash flow
$10,953 − $18,597 = −$7,644 a year, or −$637 a month. On $73,980 of down payment and closing costs, that is a −10.3% cash-on-cash return.
What good cash flow looks like
There is no single number, but three tests catch most bad deals. First, cash flow should be positive after a capital reserve, not just after the mortgage; a roof or a special assessment wipes out years of thin monthly profit. Second, cash-on-cash return, annual cash flow over the cash you put in, is how you compare the rental with anything else that money could do. Investing guides often cite 8% to 12% as a target.
Third, debt coverage: NOI divided by the year’s mortgage payments. Commercial lenders commonly look for 1.2 or more, meaning the property earns 20% more than its debt costs. The Calgary preload covers its mortgage 0.59 times. Anything under 1.0 means the rent does not cover the mortgage, and you are topping it up.
Then stress it. Fixed terms renew. The calculator shows cash flow one and two points higher, because a deal that works at 4.50% and fails at 6.50% is a five-year deal, not a long-term one.
The 1%, 2% and 50% rules, tested on Canadian cities
The 1% rule says monthly rent should be at least 1% of the price; the 2% rule doubles that. Both came out of cheaper U.S. markets. On a typical two-bedroom, rent is 0.40% of price a month in Mississauga and 0.68% in Winnipeg, the best of the ten. Treat the rules as a sign of how far a deal is from paying for itself, not as a pass mark.
The 50% rule says operating expenses, excluding the mortgage, will eat about half the rent. It holds up better. On the Calgary preload, expenses take 48.1% of collected rent, with the condo fee as the largest line. For a house with no condo fee, add a capital reserve before you trust a lower ratio.
Down payment and mortgage rates for rental properties (September 2026)
The Bank of Canada held its policy rate at 2.25% on September 2, 2026; the next decision is October 28, 2026. Five-year fixed mortgages do not move with it directly. The best advertised 5-year fixed rates that week were about 4.09% to 4.39%, and lenders typically add 0.2 to 0.6 of a point for a rental. The calculator preloads 4.5%; replace it with your quote.
- Not living there:20% minimum down. Default insurance is not available on a one-unit rental you don’t occupy; CMHC’s Income Property product insures two to four units up to 80% of value.
- Living in one unit: 5% on the first $500,000 and 10% on the rest for one or two units; 10% for three or four units; purchase price under $1.5 million.
- Qualifying: uninsured mortgages are stress-tested at the greater of 5.25% or your contract rate plus 2 points. At 4.5%, that is 6.5%.
- Rental income and OSFI’s 2026 rules:OSFI said in November 2025 that investors can still use rental and other income to qualify. What changed is classification: when more than half the income used to qualify comes from the property’s own rent, banks treat the loan as income-producing real estate and hold more capital against it, and income counted for one property cannot simply be counted again for the next. Mortgage brokers say that can mean tighter terms for investors who rely mostly on rent.
When a rental has negative cash flow
Negative cash flow is normal in Canada’s most expensive cities, not a rare mistake. Urbanation and CIBC found that 30% of investors in GTA condos completed in 2023 were cash flow negative by $1,000 a month or more. CBC reported that in 2022 only 48% of leveraged pre-construction condo investors were cash flow positive. Those investors are counting on principal paydown and appreciation to make up the monthly loss.
That can work, but only with money set aside for the shortfall, a rate you can carry at renewal and a plan for a flat market. Year one of the Mississauga preload pays down $11,053 of principal against −$20,245 of cash flow. If the price does not rise, the owner is paying to own. The three ways to fix it are the three fields to test: more rent, a lower price or a bigger down payment.
Rental property expenses to include
- Vacancy. CMHC's rate for the city; newer and campus-area buildings often run higher.
- Property tax. The city's residential rate on the purchase price; replace with the tax bill.
- Landlord insurance. A rental policy, not a homeowner's policy, plus the building's deductible.
- Condo fees. Check what they include; older buildings often cover heat and water.
- Maintenance. About 5% of rent for repairs, turnover painting and appliances in the unit.
- Capital reserve. Roof, windows, furnace on a house or plex; a condo's reserve fund covers the building.
- Property management. Typically about 8% of rent collected, plus leasing fees.
- Utilities you pay. Water, heat or hydro the lease doesn't pass to the tenant.
- Accounting and licensing. Tax preparation, rental licences or registration where the city requires them.
- Special assessments. Not a monthly cost until they are; read the reserve fund study before buying.
Tax on rental income in Canada
Cash flow in this calculator is before tax. Net rental income is added to your other income and taxed at your marginal rate, reported on form T776. The deductions that matter most are the ones investors get wrong:
- Mortgage interest is deductible; principal is not. A deal with negative cash flow can still show taxable income, because principal paydown comes out of your cash but not your taxes. In year one of the Calgary preload, $6,240 of the payments is principal.
- Capital cost allowance is optional. You can depreciate the building (not the land), but CCA cannot create or increase a rental loss, and it is recaptured as income when you sell above its depreciated value.
- Selling is a capital gain. Half of the gain is taxable, and the principal residence exemption does not cover a property you only rented out.
Rental property cash flow FAQs
How do you calculate cash flow on a rental property?
Start with a year of rent, subtract vacancy, then subtract operating costs: property tax, insurance, maintenance, management, condo fees and utilities you pay. That is net operating income. Subtract a year of mortgage payments and any capital reserve. What is left is annual cash flow; divide by 12 for monthly.
What is a good cash flow for a rental property in Canada?
Positive after every cost, including vacancy, maintenance and a capital reserve, with enough cushion to survive a renewal at a higher rate. At 4.50% with 20% down, the preloaded two-bedroom condo is cash flow negative in 10 of the 10 cities in this calculator, so most big-city investors are judged on break-even rent and total return rather than monthly income.
What is the 1% rule and the 2% rule?
They are screening rules of thumb: monthly rent should be at least 1% (or 2%) of the purchase price. No city here comes close on a typical two-bedroom. Winnipeg is highest at 0.68% of price a month and Mississauga lowest at 0.40%.
Is an 8% return on a rental property good?
Investing guides often cite 8% to 12% cash-on-cash as a target. Cash-on-cash is annual cash flow divided by the down payment plus closing costs. A leveraged condo in Toronto or Vancouver is negative on that measure; compare the total return, including principal paydown, with what the same cash would earn elsewhere.
How much down payment do you need for a rental property in Canada?
20% if you will not live in it; mortgage default insurance is not available on a non-owner-occupied one-unit rental. If you live in one of the units, CMHC-insured financing allows 5% on the first $500,000 and 10% on the rest for one or two units, and 10% for three or four units, up to a $1.5 million price.
Are mortgage rates higher on rental properties?
Usually a little. Rate comparison sites put rental premiums at about 0.2 to 0.6 of a point over owner-occupied rates for the same term. Advertised 5-year fixed rates were about 4.09% to 4.39% in mid-September 2026, which is why the calculator preloads 4.5%.
Does cash flow include principal paydown and appreciation?
No. Cash flow is money in and out of your account. Principal paydown builds equity but is part of the mortgage payment, and appreciation only shows up when you sell or refinance. The calculator shows year-one principal separately so you can see total return.
Is rental income taxed in Canada?
Yes, at your marginal rate, reported on form T776. You can deduct mortgage interest (not principal), property tax, insurance, condo fees, repairs, management and advertising. Capital cost allowance on the building is optional and cannot create or increase a rental loss, and it can be recaptured as income when you sell.
Run the rest of the deal
Cash flow sits on top of NOI. The cap rate calculator runs the same building without the mortgage, the land transfer tax calculator breaks down the biggest closing cost, and the condo fee calculator checks the fee against the city average. City pages: Toronto, Ottawa, Hamilton, Mississauga, Brampton, Vancouver, Calgary, Edmonton, Montreal, Winnipeg.
Sources
- Bank of Canada: policy rate held at 2.25% (September 2, 2026)
- Ratehub: advertised 5-year fixed rates
- nesto: Canadian mortgage rates
- bestrates.ca: investment property rates run 0.20% to 0.60% above owner-occupied
- CMHC: Income Property mortgage loan insurance
- OSFI: Clarifying guidance on rental income and mortgage classification (2025)
- Rentals.ca National Rent Report (asking rents)
- CRA: Rental Income guide (T4036)
- Urbanation and CIBC: GTA Condo Investment Report (July 2024)
- CBC News: More than half of GTA condo investors losing money (2023)
Rates checked September 13, 2026. CMHC rents and vacancy are from the October 2025 Rental Market Survey; asking rents are mid-2026 averages compiled from Rentals.ca and CMHC. Condo fees are city averages per square foot on an 800sq ft two-bedroom. This calculator is an estimate for planning, not financial or tax advice. Replace every preload with the listing, the lease and the lender’s quote.