Rental Yield Calculator
Quickly assess a building's potential before purchase: net operating income, cap rate, cash flow, and return on your down payment.
Building and financing
Income
Annual operating expenses (optional)
Estimated result
Monthly mortgage payment$2,456.35
Net operating income (NOI, annual)$46,560.00
Capitalization rate (cap rate)9.3%
Gross rent multiplier (GRM)10.4×
Debt coverage ratio1.58×
Monthly cash flow$1,423.65
Return on down payment (cash-on-cash)17.1%
Estimate based on standard real estate analysis formulas (NOI, cap rate, cash-on-cash). Does not account for taxation, unforeseen renovations, or actual financing conditions — always validate the numbers with your financial institution before a purchase.
Track real profitability after purchase
Once the building is acquired, Gestion de portes centralizes your income, expenses, and finances to track its profitability over time.
FAQ
Frequently asked questions about rental yield
How do you calculate a building's rental yield?+
Rental yield is assessed from net operating income (NOI): effective gross rents (after vacancy) minus operating expenses (taxes, insurance, maintenance, management). The capitalization rate (NOI ÷ purchase price) measures the building's return independent of financing, while the cash-on-cash return accounts for mortgage debt service.
What's a good cap rate in Québec?+
There's no universal threshold — an acceptable cap rate varies by market, building type, and risk tolerance. As a rule of thumb, investors generally compare the cap rate obtained to that of comparable buildings recently sold in the same area rather than to a fixed number.
What's the difference between cap rate and cash-on-cash return?+
The cap rate assesses the building's profitability as if it were paid for in cash, with no financing. The cash-on-cash return instead measures the cash flow actually generated relative to the amount you invested (the down payment), after paying the mortgage — it's the most relevant measure for a financed purchase.
Does this calculator replace a professional financial analysis?+
No. It provides a quick estimate based on standard real estate analysis formulas, but it doesn't account for taxation, unforeseen renovations, or actual financing conditions. Always validate the numbers with your financial institution before a purchase.
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