How every investment number on this site is calculated

Every number has a label

Each figure going into an analysis says where it came from, and the result says how strong its weakest input is.

• Documented — from a document we have seen: a signed lease, a tax notice, a financial statement.
• Claim — stated by the seller or the listing brokerage (asking price, listed taxes, listed condo fee, "legal suite" in the remarks). Not independently checked.
• Estimate — a market estimate, shown as a range where possible. An estimated rent is never treated as what a property earns today.
• Assumption — a number you chose (vacancy, interest rate, reserve). Change it to test the deal.
• Unknown — not known. An unknown is never treated as zero: anything that depends on it is left blank and the result says Not enough information to assess.

Four scenarios, never one rosy number

• As-is — the property as it earns today. Projected rents are not used here.
• Stabilized — after a stated plan (renovation, a new suite, lease-up), using the proposed figures you enter.
• Conservative — the unfavourable end of every range, and rent from a suite whose legality is unverified left out.
• Downside — conservative plus stated shocks: rent −10%, vacancy +5 points, operating costs +10%, rates +1 point at renewal, renovation +20%, three months of delay, exit value −10%, exit cap rate +0.5 point. These are assumptions to stress the deal, not forecasts, and you can change them.

The formulas

• Effective gross income = potential rent − vacancy − credit loss + other income.
• Net operating income (NOI) = effective gross income − operating expenses. NOI leaves out loan payments, money set aside for future repairs, renovation spending, depreciation and your income tax.
• Cap rate = year-one NOI ÷ purchase price. A cap rate the seller advertises is shown separately and is never mixed with ours.
• Debt service coverage (DSCR) = NOI ÷ scheduled loan payments for the first 12 months. With no loan it is not applicable, not infinite. Lenders use their own definitions; this is not an approval.
• Cash flow after reserve = NOI − all scheduled loan payments − the reserve you set aside. The part of each payment that repays principal builds equity; it is shown separately and is never counted as cash you can spend.
• Cash-on-cash = annual cash flow after reserve ÷ the cash you put in (down payment, closing and financing costs, purchase taxes, immediate work). A deposit is part of the down payment, never counted twice. Money held back as a cushion is reported separately.
• Break-even rent and occupancy — the rent, or the share of the year rented, at which cash flow after reserve is exactly zero.
• Return over a hold — dated cash flows (your cash in, each year's cash flow, then the sale less selling costs and the remaining loan) give an internal rate of return (XIRR), an equity multiple and, if you give a discount rate, NPV. When the cash flows change sign more than once and more than one rate fits, no single return is shown — we list the rates instead.

Canadian mortgage arithmetic

Fixed-rate Canadian mortgages compound semi-annually. For a nominal annual rate r, the monthly rate is i = (1 + r/2)^1/6 − 1, and the payment on principal P over n months is P·i ÷ (1 − (1 + i)⁻ⁿ); at a zero rate it is P ÷ n. The term (often five years) and the amortization (often 25) are kept apart: past the term, the analysis needs a renewal rate you state — today's rate is never carried forward silently. Interest-only periods and second loans are modelled when you enter them. Variable, private, commercial and construction loans follow the terms you enter, not this convention.

Strategy by strategy

• Rentals and suites — unit by unit. A suite that does not exist yet earns nothing until the stabilized scenario. "Legal suite" in a listing is a lead: we check the address against the City of Calgary Secondary Suite Registry, and only a registry match is shown as registered. Not being on the registry does not make a suite illegal.
• House hacking — what living in one unit costs you is shown apart from what the rented units return.
• BRRRR — the refinance is tested against the lender limits you enter (loan-to-value, DSCR). If it fails, the cash stays in the deal and the original loan stays. Money released by a refinance is borrowed, not profit.
• Renovation resale — profit before tax after purchase, renovation, holding, financing and selling costs, plus the sale price at which you break even and what each month of delay costs. Gains on a home held under a year may be taxed as business income under the federal residential property flipping rule; ask your accountant.
• Commercial — lease by lease, with rent per square foot per year or per month kept straight, recoveries, expiries, downtime, tenant improvements and leasing commissions below NOI.
• Businesses — revenue, EBITDA and seller's discretionary earnings are not the same as cash flow. We show the owner-operated and manager-operated cases, separate pay for your work from return on your money, and remove rent a business pays to its own building so profit is not counted twice.
• Land and development — residual land value from revenue, hard and soft costs, financing, contingency and a profit target. A zoning label does not prove density, servicing, approvals, financing or profit.

What this method will not do

• Invent a rent, a tax, an insurance premium, a rate or a vacancy. If it is missing, the answer says so.
• Let an AI do the arithmetic. AI may help read a document; every number it proposes is checked against its page citation and confirmed by a person before it counts. The calculations are fixed, versioned code.
• Calculate your income tax, or certify a financing product as compliant with any religious or regulatory standard. Alternative and halal financing is modelled only from the provider's own quoted cash flows.
• Rank MLS® listings by a projected return. Listings do not include rent, so a ranking would rest on a guess. You can run any listing through the analyzer with your own rent and financing, and every listing in a report keeps its listing brokerage.

Simple view, Pro view, four languages

Simple view and Pro view read the same calculation, so their numbers always match. The Bangla, Hindi and Urdu wording is machine-translated and marked as such until a fluent reviewer signs it off; the numbers are identical in every language. Each analysis carries the engine version and a fingerprint of its inputs, so a report you received can be checked later against the inputs it was built from.