Free tools

Plex return calculator

Enter a plex's price, rents and expenses: the tool works out its net operating income, its ratios (GRM, cap rate, DSCR) and what's left after the mortgage.

The building and its financing

The building

Purchase price ($)

Number of units

Purchase costs ($)

Welcome tax, notary, inspection. Counted in your total cash invested.

Income (per month)

Monthly rents, total ($)

All units, at market rent if vacant.

Other monthly income ($)

Parking, laundry, storage.

Vacancy and bad debts (%)

2 to 5% is common.

Expenses (per year)

Municipal and school taxes ($)

The amounts on the tax bills, not the assessment.

Insurance ($)

Heating and power you pay ($)

Common areas and whatever the leases include.

Maintenance and repairs ($)

Also plan for replacing the roof, windows, etc.

Other expenses ($)

Snow removal, janitor, accountant, permits.

Management (% of rent collected)

0 if you manage it yourself.

Financing

Down payment (%)

Mortgage rate (%)

Fixed rate, compounded semi-annually as in Canada.

Amortization (years)

Cash flow after the mortgage

$6,912 per year

or $576 a month

Capitalization rate (cap rate): 5.35%
Gross rent multiplier (GRM): 12.6
Debt service coverage ratio (DSCR): 1.18
Cash-on-cash return: 3.1%

DSCR below 1.20: income barely covers the mortgage. A lender could require a larger down payment.

Income, expenses and cash flow per year
Potential gross income	$67,200
Vacancy and bad debts	− $2,016
Effective gross income	$65,184
Operating expenses	− $19,700
Net operating income (NOI)	$45,484
Mortgage payments	− $38,572
Cash flow	$6,912

Financing and ratios
Price per door	$212,500
Expenses / effective income	30%
Down payment	$212,500
Mortgage loan	$637,500
Monthly payment	$3,214.37

Estimate for information only, not financial advice or a financing offer. Lender requirements (coverage ratio, down payment, qualifying rate) vary; talk to your institution or mortgage broker.

What each ratio measures

Net operating income (NOI): effective income (rent minus vacancy) minus operating expenses, before the mortgage and income tax.
Gross rent multiplier (GRM): price ÷ annual gross income. The lower it is, the less you pay for each dollar of rent. Handy for comparing plexes in the same neighbourhood, but blind to expenses.
Cap rate: NOI ÷ price. The building's return if bought with cash; it compares buildings with different expenses.
Debt service coverage ratio (DSCR): NOI ÷ annual mortgage payments. Below 1, the rents don't pay the mortgage.
Cash-on-cash return: annual cash flow ÷ (down payment + purchase costs). It ignores principal repaid each month, appreciation and income tax.

The mortgage payment follows the Canadian rule: a fixed rate is compounded semi-annually, not monthly (Interest Act, s. 6).

And with Plexago

Once you own the building, Plexago keeps these numbers current.

Rent billed and collected, expenses categorized, taxes and insurance: each building's report shows its real net income, month after month.

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