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Real Estate Calculators

Monthly Cash-flow

See if your property generates profit or costs you money each month after all expenses.

Monthly Income

Total rents collected per month
Parking, laundry, etc.

Monthly Expenses

Monthly principal + interest
Annual property taxes ÷ 12
Annual school taxes ÷ 12
~1% of property value per year ÷ 12
If paid by the owner

GRM — Gross Rent Multiplier

Quickly assess if the asking price is reasonable compared to rental income. It’s the first filter used by investors.

Property Information

Sale price listed on the MLS
Total rent over 12 months (before expenses)
Where to find these numbers? The asking price is on the MLS listing. Gross income can be found in the leases or the seller's tax returns.

Capitalization Rate (Cap Rate)

Measure the property’s true yield independently of your financing. Ideal for fairly comparing two properties.

Income & Vacancy

5% is a common value

Annual Operating Expenses (excluding mortgage)

~1% of property value per year

Monthly Mortgage Payment

Estimate your monthly payment (principal + interest) using Canadian standard with semi-annual compounding.

Financing Information

Amount you invest upfront
Fixed or variable rate offered by your institution
25 years is the most common duration

Down Payment and Total Purchase Budget

Calculate the full required budget: down payment, closing costs, land transfer tax (Quebec 2024), and emergency reserve.

Price and Down Payment

Minimum 5% for properties under $500,000

Estimated Closing Costs

Between $1,000 and $2,500
Strongly recommended
Adjustments, moving, etc.
Land Transfer Tax Calculated Automatically According to Quebec's progressive rates (2024).

Emergency Reserve

Recommendation: Minimum 3–6 months

Debt Coverage Ratio (DCR)

Check if the property's net income sufficiently covers the debt service. Key indicator used by banks to approve financing.

Income and Vacancy

Annual Operating Expenses (excluding mortgage)

Debt Service

Monthly Payment × 12 (Principal + Interest)

Return on Invested Capital

Measure how much your invested money actually earns each year. Compare your real estate investment to other investment options.

Monthly Income

Parking, laundry, etc.

Monthly Expenses

Total taxes ÷ 12 months

Your Investment

Total Out-of-Pocket Amount (down payment + closing costs)

Monthly Cash-flow

The money left in your pocket each month

What is it?

Cash-flow is the difference between all property income and expenses, including mortgage repayment. Positive cash-flow means tenants cover your expenses AND leave you a surplus.

Formula

Cash-flow = Total Income − Total Expenses
Expenses = Mortgage + Taxes + Insurance + Maintenance + Management + Utilities + Vacancy

Concrete Example

Quadruplex: Rent = 4,800 $/mo, total expenses = 4,200 $/mo
Cash-flow = 4,800 − 4,200 = 600 $/mo ($150/unit)
Excellent. Rule of thumb: minimum $75 per unit per month.

Recommended Thresholds

> 75 $/moExcellent
0 – 75 $Fragile
NegativeAvoid

Two items beginners often forget

1. Maintenance: Plan 1% of property value per year. On a 600,000 $, set aside $500/mo for repairs.

2. Vacancy: Plan 5% of gross income, about 1 empty month per year. Forgetting these often turns positive cash-flow negative.

GRM — Gross Rent Multiplier

The investor's first filter

What is it?

GRM shows how many times you pay the property's annual gross income. It's the quickest filter to know if a price is reasonable before detailed calculations. The lower the GRM, the better price you pay relative to income.

Formula

GRM = Purchase Price ÷ Annual Gross Rental Income

Concrete Example

Triplex in Laval: Asking Price = 750,000 $, annual rents = 60,000 $
GRM = 750,000 ÷ 60,000 = 12.5
Interpretation: you pay 12.5 times the annual income. This is excellent according to the new Quebec market thresholds.

Quebec Market Thresholds

< 16Excellent
16 – 18Acceptable
> 19Avoid

Warning

GRM does not account for expenses. A property with a good GRM can still have poor cash-flow if expenses are high. Use it as the first filter, then calculate cap rate and cash-flow to confirm.

Cap Rate — Capitalization Rate

The property's true profitability

What is it?

Cap rate measures the net yield of a property regardless of your financing. It allows you to compare properties fairly, no matter your down payment or mortgage rate. It's the universal measure used by appraisers and professional investors.

Formula

Cap Rate = NOI ÷ Purchase Price × 100
NOI = Effective Income − Operating Expenses (excluding mortgage)

Concrete Example

Duplex in Quebec: Price = 500,000 $, gross income = 36,000 $, expenses = 12,000 $
NOI = 36,000 − 12,000 = 24,000 $
Cap Rate = 24,000 ÷ 500,000 × 100 = 4.8%
The property generates 4.80 $ of net income for every 100 $ invested.

Quebec Market Thresholds

> 6%Excellent
4 – 6%Acceptable
< 4%Avoid

Strategic Advice

If your mortgage rate exceeds the cap rate, you are in negative leverage: your debt costs more than the property earns. With a 5% rate and a 4% cap rate, you lose 1% on each borrowed dollar.

DCR — Debt Coverage Ratio

The bank's test

What is it?

DCR measures if the property's net income sufficiently covers debt repayment. It's the key indicator banks use to approve or deny financing. A DCR of 1.25 means for every dollar of debt to repay, the property generates $1.25 of net income.

Formula

DCR = Annual NOI ÷ Annual Debt Service
Debt Service = Monthly Payment × 12

Concrete Example

Triplex: NOI = 30,000 $, monthly payment = 2,000 $ (24,000 $/yr)
DCR = 30,000 ÷ 24,000 = 1.25
Banks generally require a minimum of 1.20 to 1.25. This deal just passes.

Bank Thresholds

> 1.30Excellent
1.20 – 1.30Acceptable
< 1.10Rejected

Bank Practice

Banks apply a stress test rate (contracted rate + 2%) to calculate debt service. They also use conservative expense estimates (often 35–45% of gross income). Your calculated DCR is optimistic — plan a margin.

Return on Invested Capital

Your actual personal investment return

What is it?

Return on invested capital measures annual return on your personal invested money (down payment + closing costs). It's the most relevant measure for investors, accounting for leverage: you control a $600,000 asset with only $120,000 down.

Formula

Return = Annual Cash-flow ÷ Total Invested Capital × 100
Total Invested Capital = Down Payment + Closing Costs + Land Transfer Tax

Concrete Example

Annual cash-flow = 7,200 $, total invested capital = 130,000 $
Return = 7,200 ÷ 130,000 × 100 = 5.5%
For comparison, a 1-year GIC offers ~4.5% without management or risk. Real estate compensates with appreciation and principal repayment.

Recommended Thresholds

> 8%Excellent
4 – 8%Acceptable
< 4%Low

Actual total return is higher

This calculation counts only cash-flow. Total return also includes:
① Appreciation: property value increase (~3–5%/yr historically in Quebec)
② Principal repayment: tenants repay your mortgage each month
③ Tax benefits: interest deductions, depreciation, management fees
The actual total return on a good property can easily reach 12–18% per year.