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LendCity™

Multifamily Cash Flow Analyzer

Analyze the cash flow potential of apartment buildings and multifamily properties. Calculate NOI, DSCR, cap rates, and cash-on-cash returns instantly.

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LendCity™ Mortgages

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This Multifamily Cash Flow Analysis is just the beginning. Our team of specialists is ready to help you structure your next deal for maximum growth and cash flow.

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Direct Line

+1 (226) 783-1640

Strategy team

scott@lendcity.ca

Office Location

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Windsor, ON N8Y 1H8

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Note: This calculator uses standard financing formulas and is intended for educational and estimation purposes. Actual results may vary based on local market conditions, lender requirements, and specific property circumstances. Consult with a mortgage professional for accurate financing details.

Core metrics Screening model

Four numbers that size the deal

Actual DCR uses lender vacancy, management, and reserve standards. Pair with MLI max-loan for insured 5+ unit proceeds.

NOI EGI − opex

Profit before debt

DSCR NOI / P&I

Min 1.10–1.30x

Cap rate NOI / Price

Unlevered return

Cash-on-cash CF / Equity

Return on cash in

Simple 4-Step Process

How to Use the Multifamily Cash Flow Analyzer

Analyze your apartment building investment in minutes. Enter property details, operating expenses, and financing terms to see complete cash flow projections.

  • № 01 01

    Enter Property Details

    Input the number of units, average monthly rent, other income sources, and expected vacancy rate.

  • № 02 02

    Add Operating Expenses

    Include annual property taxes, insurance, utilities, maintenance, plus management and capital reserve percentages.

  • № 03 03

    Input Financing Terms

    Enter the purchase price, down payment percentage, interest rate, and amortization period.

  • № 04 04

    Review Results

    See NOI, DSCR, cash flow, cap rate, and per-unit metrics to evaluate the investment opportunity.

Critical Cash Flow Metrics

Key Metrics for Apartment Building Analysis

Learn the essential metrics investors use to evaluate multifamily properties and make informed investment decisions.

  • № 01

    Net Operating Income (NOI)

    The property's profitability before debt service. Higher NOI indicates better operational efficiency and stronger returns.

  • № 02

    DSCR (Debt Service Coverage Ratio)

    Shows whether rental income covers the mortgage payment. CMHC requires minimum 1.10x; conventional lenders typically want 1.20-1.30x.

  • № 03

    Cap Rate

    NOI divided by purchase price. Indicates property's return on investment. Higher cap rates suggest better value for the purchase price.

  • № 04

    Cash-on-Cash Return

    Annual cash flow divided by your equity investment. Shows the percentage return on your actual down payment.

  • № 05

    Per-Unit Economics

    Price per unit and NOI per unit allow comparison between different sized properties and markets.

  • № 06

    Expense Ratio

    Operating expenses as a percentage of gross income. Lower ratios indicate more efficient operations and higher profitability.

Related A–Z

Related Resources

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FAQ Q & A

Multifamily Cash Flow Calculator FAQ

Everything you need to know about analyzing apartment building cash flow and investment returns.

Multifamily Basics

Cap rates vary by market and property type, but typically range from 4% to 8% for apartment buildings. Higher cap rates may indicate better returns but also higher risk. Your target cap rate depends on your investment strategy, local market conditions, and acceptable risk level. Markets like the Sun Belt tend to have higher cap rates than established coastal markets.
NOI = Gross Potential Income - Vacancy Losses - Operating Expenses. Gross Potential Income includes all rental income plus ancillary income (parking, laundry, etc.). Operating expenses include taxes, insurance, utilities, maintenance, and management fees. NOI excludes debt service and capital expenditures, making it useful for comparing properties regardless of financing.
Common apartment building operating expenses include: property taxes, insurance, utilities (if landlord-paid), routine maintenance and repairs, property management (typically 4-8% of rental income), landscaping, trash removal, pest control, and capital reserves (typically 3-5% for replacements). Don't include debt service, principal payments, or major renovations in NOI calculations.

Financing & DSCR

DSCR requirements vary by lender: CMHC (Canada Mortgage and Housing Corporation) requires minimum 1.10x DSCR. Conventional lenders typically require 1.20-1.30x DSCR for stronger qualification and better rates. Some specialized lenders offer 0.75x or even 'no-ratio' programs but may charge higher rates or require larger down payments (30%+). The higher your DSCR, the better your loan terms.
Larger down payments improve your loan terms and DSCR ratio. Typical down payments range from 15-30%: 15-20% down gets better rates if DSCR is strong, 25-30% down may be required for lower DSCR or specialized programs. A larger down payment reduces your loan amount, lowering monthly payments and improving your DSCR. It also increases your equity and potential cash-on-cash return.
CMHC (Canada Mortgage and Housing Corporation) offers government-insured loans for residential properties with 1.10x minimum DSCR. Conventional lenders offer non-insured loans, typically requiring 1.20-1.30x DSCR but potentially offering better flexibility on terms. CMHC loans have insurance costs built in; conventional loans may have stricter income verification requirements. Both require property appraisals and lender approval.

Investment Analysis

Cash-on-cash returns typically range from 4% to 12% for apartment buildings, depending on market, property condition, and financing. A 6-8% cash-on-cash return is considered solid for most markets. Returns depend on three factors: NOI (higher rents and lower expenses improve returns), down payment size (larger down payments reduce monthly returns), and interest rate (lower rates increase cash flow). Combined with appreciation, strong properties can deliver excellent overall returns.
Use per-unit metrics to compare properties of different sizes: Price per unit (lower is better if NOI per unit is similar), NOI per unit (higher indicates better efficiency), and Cap rate (higher typically indicates better returns). Also compare expense ratios to identify management differences, and analyze location and tenant quality. Run cash flow analysis for your specific financing scenario rather than relying on these metrics alone.
Vacancy directly reduces Effective Gross Income. A 5% vacancy rate is typical; some markets run 3-4%, others 7-10% or higher. Each 1% vacancy loss reduces your income proportionally. For a $100,000 annual rental income, moving from 5% to 10% vacancy cuts NOI by $5,000 annually and may hurt DSCR. Use conservative vacancy assumptions based on local market history. Newer or well-maintained properties may justify lower vacancy assumptions.

Tax & Depreciation

Depreciation is a non-cash expense deduction. You can depreciate the building (but not land) over 27.5 years, creating tax deductions even if the property appreciates. For example, a $1M building depreciates $36,364 annually, reducing taxable income without affecting cash flow. This allows investors to shelter rental income from taxation while receiving cash flow. Depreciation recapture applies when you sell, but this deferral strategy is powerful for long-term investors.
Yes. Deductible operating expenses include: mortgage interest (not principal), property taxes, insurance, utilities, maintenance and repairs, property management fees, advertising for tenants, legal and accounting fees, and capital reserves. This is why operating expense analysis is important—tracking all deductible items minimizes taxable income. Capital improvements (major replacements) are depreciated; repairs and maintenance are deducted in the year incurred.
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