London rental property calculator: cap rate & cash flow
Whether a London rental is worth it comes down to its monthly cash flow. At the example numbers below, it loses $1,208 a month.
You might be worried about buying a rental that loses money every month. This shows you before you write an offer.
The Bottom Line (Quick Answer)
- This calculator is for rentals in London, Ontario. It shows the cap rate, the cash flow and the cash-on-cash return.
- It leaves out closing costs, income tax, rent growth and the home’s value over time.
- Buying with the Ken Small Real Estate Team costs $495 to start. Our 3% is paid from the seller’s side. If a seller offers less, you never pay the difference.
The short version
- Run the starting numbers below and this example loses $1,208 a month.
- The mortgage is $2,820. The rent left after costs and vacancy is $1,612.
- Put in your property’s numbers to see yours. It is an estimate to help you plan, not investment or tax advice.
The City of London’s average price for September 2026 was $591,927 (LSTAR / CREA). That average mixes every type of home. It is not your property’s number.
Put in your own price and rent. You see the cap rate, the monthly cash flow and the cash-on-cash return.
How to read your result
Cap rate
Net operating income divided by the price. It is what the property earns before the mortgage. It lets you compare two very different buildings the same way.
Cash flow
What is left each month after the mortgage and the operating costs. Positive means the property pays you to hold it. Negative means you feed it every month. That is sometimes worth it for appreciation. But choose that on purpose, not by accident.
Cash-on-cash return
Your yearly cash flow divided by the cash you put in, your down payment. It answers one question: what is my money actually earning? Use it to compare a rental with leaving the cash somewhere else.
What it costs to buy a rental property in London
A home you will not live in generally needs at least 20% down, plus closing costs. Closing costs include land transfer tax, legal fees and an inspection. The Buyer Closing-Cost Calculator works them out for your price.
What it costs to buy with us. It costs $495 to start. Our commission is 3%, paid from the seller’s side of the deal. If a seller offers our brokerage less than 3%, you never pay the difference. Every number is on buyer pricing and fees.
What is a good cap rate in London, Ontario?
There is no single right number. Compare a home with others of the same type, in the same area, at today’s prices. Multi-unit buildings and student rentals rented by the room usually do better than a single-family house. They also take more work.
Who this is not for
It is a first look, not a full analysis. It leaves out closing costs, income tax, rent growth and the home’s value over time. It uses one rent for the whole property, so a house rented by the room needs the total.
And if you want someone to tell you every property is a good deal, we are not your team. We will tell you when the answer is no.
What do London clients say about Ken?
★★★★★All the way from the start of the house search, Ken was there to help at every step. From setting up search criteria that exactly met our needs, to getting viewings scheduled, to providing honest feedback about the properties (which is often rare for most agents); Ken went above and beyond our expectations. 10/10 experience with Ken.
J H · Buyer · Apr 2023 · via Google
4.9 average from 14 Google reviews, as shown on our reviews page (October 2026). Read every review →
The honest takeaway
Take the example: $603,000, 20% down, 5.0% over 25 years. The rent would need to be about $4,548 a month to break even. That is the gap a house bought at full price has to close.
Questions investors ask about the numbers
What is a good cap rate for a rental in London, Ontario?
Is London, Ontario a good place to invest in real estate?
How is the rental market in London, Ontario?
Why is the cash flow negative on so many London properties?
What down payment do I need for an investment property?
Does this include closing costs?
Does this calculator include income tax?
Are student rentals near Western a good investment?
Can Ken help investors who live out of town?
Found one that pencils out?
Bring Ken the address. We will pressure-test the numbers with you and flag the risks. Then we tell you whether it is worth an offer, even when the answer is no.
About Ken Small
Ken Small, REALTOR®, has been a real estate agent in London since 2003. He leads the Ken Small Real Estate Team at Century 21 First Canadian Corp., Brokerage. The office is at 420 York Street, London, ON N6B 1R1. RECO #4727293. Meet the team →