For Canadian property investors
Canada Cap Rate Calculator
Calculate the cap rate and indicative value of a Canadian rental property in Canadian dollars, using its income, operating expenses and cap rates for similar properties in the same local market.
Your numbers
Estimated value range
Midpoint ≈ $531,136, based on a 4.0%–5.5% cap rate.
This is a guide, not a valuation. It estimates a value range from the numbers you enter using the capitalisation rate method — it is not a formal, certified or professional property valuation. Always seek independent, professional valuation advice before making any financial or investment decision.
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How we got there
- Annual rental income
- $33,600
- Less operating expenses
- − $9,000
- Net operating income (NOI)
- $24,600
- Value = NOI ÷ cap rate
- $447,273 – $615,000
An estimate only, built entirely from the figures you enter — not a valuation. It excludes comparable sales evidence, property condition, financing and tax. Figures update as you type.
How cap rates work in Canada
Canadian investors use the capitalization rate to compare a property's net operating income with its value, without the effect of mortgage financing or personal tax.
Net operating income (NOI)
Annual rent − operating expenses
Rental income after property taxes, insurance, management, utilities paid by the owner, condo fees where applicable, repairs and maintenance — but before mortgage payments, income tax and depreciation or capital cost allowance.
Value from cap rate
Indicative value = NOI ÷ cap rate
Divide NOI by a cap rate drawn from comparable properties in the same Canadian city, neighbourhood and asset class. A lower cap rate implies a higher value for the same income.
A Canadian worked example
A rental property earns $42,000 CAD per year and has $9,000 in annual operating expenses, leaving NOI of $33,000. If comparable properties in the local market trade at cap rates of 4.5% to 5.5%, the indicative value range is approximately $600,000 to $733,000 CAD. This is a market sense-check, not an appraisal.
This isn't a professional appraisal
The estimate uses only the figures you enter. It is not a Canadian Uniform Standards of Professional Appraisal Practice (CUSPAP) appraisal and should not be relied on for financing, buying, selling, insurance, tax or legal decisions.
- Cap rates vary by province, city, neighbourhood, property type, condition, tenant quality and lease terms.
- Property taxes, condo fees and owner-paid utilities can materially change NOI between otherwise similar properties.
- Residential and commercial properties are valued differently, and cap-rate evidence may be limited for some residential markets.
- Interest rates and local market conditions change the cap rates buyers accept over time.
Before making an investment decision, speak with an accredited Canadian real estate appraiser, local commercial real estate professional, lender and qualified tax adviser as appropriate.
Choosing a Canadian market cap rate
Use evidence from recent sales of comparable properties in the same local market and asset class. A Toronto condominium, a Calgary multiplex and a Halifax retail property should not share one benchmark simply because they are all in Canada. Ask a local appraiser or broker what buyers are accepting for properties with similar leases, condition and operating risk.
Related insights
What is capitalization rate?
Understand what cap rate measures, how NOI is calculated and how cap rate differs from rental yield.
Read the articleCanada rental property calculator
Model buying costs, mortgage and equity, cash flow and cap rate in Canadian dollars.
Read the articleGlobal cap rate calculator
Use the non-regional calculator with a wider choice of currencies.
Read the articleLooking for the broader investment picture? Open the Canadian property investment calculator, or read the Canadian cap rate formula guide. Example cap rates on this page are illustrative, not current Canadian benchmarks.