General Assumptions

Mortgage

Based on fixed rate, calculated semi-annually (standard in Canada).

Amortization Period

Number of years it takes to pay off your mortgage. Default: 30 years, unless specified.

Investment Period & Annual Appreciation (%)

Used to calculate your projected returns over time (typically 3–10 years). Market appreciation is applied annually.

Costs

Purchase Price

Price of the property before any renovations.

Renovations

Cost of any planned improvements to boost rent or value.

Closing Costs

Typical costs for Toronto purchases:

• Ontario + Toronto Land Transfer Tax

• $1,500 for legal/admin fees

Capital Required

= Downpayment + Renovations + Closing Costs

This is your total upfront investment.

Selling Fees

= 4% +HST of selling price.

Income & Cash Flow

Month 1 Rent

Total rent from all units on day one.

Month 1 Operating Expenses

All non-mortgage costs: insurance, property tax, utilities, maintenance, and vacancy buffer.

Month 1 Cash Flow

= Rent – Expenses – Mortgage Payment

Year 1 Cash Flow

= Month 1 Cash Flow × 12

Year 1 Equity Gained

Mortgage principal paid off in the first year—this builds ownership and counts as income.

Year 1 Cap Rate

= (Annual Rent – Expenses) ÷ (Purchase Price + Renovations)

Used to compare income potential across properties.

Year 1 Return Metrics

Year 1 Cash-on-Cash Return

= Year 1 Cash Flow ÷ Capital Required

Tells you how hard your cash is working—just based on monthly profit.

Year 1 Income Return on Capital

= (Year 1 Cash Flow + Year 1 Equity Gained) ÷ Capital Required

Includes both cash flow and mortgage paydown.

Year 1 Total Return on Investment

= (Cash Flow + Equity Gained + Value-Add Appreciation) ÷ Capital Required

Includes rental income, mortgage paydown, and lift from renovations.

Long-Term Projections

Total Cash Flow

Total future cash flow over the full investment period with:

• 3% annual rent increases

• 3% annual expense inflation

• 3% annual general inflation

Total Equity Gained

Total principal repaid over the full investment period.

Total Value-Add Appreciation

Lift in property value after renovations in year 1. Assumed completion value: Purchase Price + (Renovations × 2).

Total Market Appreciation

Value increase over the holding period, minus selling and closing costs.

Total Return ($)

= Total Cash Flow + Total Equity Gain + Total Value-Add Appreciation + Total Market Appreciation – Closing Costs – Selling Fees

Total Return (%)

= Total Return ($) ÷ Capital Required

Annual Return (%)

= {[(Total Return + Capital) ÷ Capital] ^ (1 ÷ Investment Period)} – 1

Your average yearly gain.

Refinancing

Projected Completion Value

= Purchase Price + Renovations + Value-Add Appreciation

Mortgage on Refinancing

= Completion Value × 80% Loan-to-Value (LTV)

Cash-Out on Refinancing

=New Refinance Mortgage – Original Mortgage

Mortgage Payment on Refinancing

Your new monthly mortgage payment after refinancing, based on updated loan terms. Calculated using amortization, interest rate, and new mortgage amount.

Net Capital on Refinancing

= Total Capital – Cash-Out on Refinancing

Monthly Cash Flow on Refinancing

= Operating Income – Refinance Mortgage Payment