Calgary rental yield calculator
Cap rate, net operating income and real monthly cash flow, with every assumption visible, because a cap rate quoted without its assumptions is close to meaningless.
Most Calgary condo and single-family rentals currently produce a cap rate between 3.5% and 5%, which means the return leans on appreciation and mortgage paydown rather than income. Below about 3.5% the property is priced for appreciation alone. Above 7% is unusual for Calgary and normally signals deferred maintenance, a difficult location, or a rent figure that is not actually achievable. Cap rate is net operating income divided by price, and it excludes financing entirely.
Run the numbers
Projection from the assumptions above, not a forecast or a guarantee of return. Verify property tax, condo fees and insurance for the actual address before relying on it. Mortgage payments use semi-annual compounding, the Canadian convention. US-convention monthly compounding overstates it.
Why cap rate and cash flow disagree
Cap rate deliberately ignores financing: it measures the property, not the deal. Two buyers paying the same price for the same building get the same cap rate and completely different cash flow, because one put 20% down and the other 35%. Use cap rate to compare properties against each other, and cash flow to decide whether you can afford to hold this one.
The number that gets missed most often is debt service coverage: net operating income divided by annual mortgage payments. Most lenders want 1.2 or better on a rental. Below that, one vacancy or one furnace is the difference between an inconvenience and a forced sale.
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- Tenant placement only: I find, screen and sign the tenant for 50–75% of one month's rent, once, and you manage from there.
Questions
What is a good cap rate for a Calgary rental?
Between 3.5% and 5% is typical for Calgary condos and single-family rentals right now. Below 3.5% the property depends on appreciation. Above 7% is unusual and normally signals deferred maintenance, a difficult location, or an unachievable rent assumption.
How do you calculate cap rate?
Net operating income divided by purchase price. Net operating income is gross rent, less a vacancy allowance, less all operating expenses, property tax, insurance, condo fees, maintenance, management and any landlord-paid utilities. Financing is excluded entirely.
Should I include property management fees in a cap rate?
Yes. Cap rate should reflect the cost of running the property whether or not you personally do the work. Excluding management makes a self-managed property look more profitable than an identical one next door, which makes the two impossible to compare and hides the value of your own time.
Sources
- Canada Mortgage and Housing Corporation (CMHC): Rental Market Survey data tables
- Calgary Real Estate Board (CREB®): Housing statistics
Figures cited from CREB® and City of Calgary sources reflect the reporting period stated on each page. Rules, fees and programs change. Confirm current details with the issuing authority before acting.
Last updated 2026-09-28 · Written by Mohammad Emon, REALTOR® (SRES®) & Licensed Property Manager, KO Realty · RECA licence CON-00133897