Many investors love the idea of owning multi-family properties, but struggle with the math behind evaluating them. Edmonton, with its affordable entry prices and strong rental demand, is a perfect place to learn how to analyze deals. Let’s walk through an example: a 10-unit apartment building in Edmonton.
Step 1: Estimate Rental Income
Assume:
- 6 one-bedroom units at $1,250/month
- 4 two-bedroom units at $1,550/month
Gross Scheduled Rent (GSR):
- 6 × $1,250 = $7,500/month
- 4 × $1,550 = $6,200/month
- Total = $13,700/month = $164,400/year
Adjust for 5% vacancy:
- $164,400 × 95% = $156,180/year (Effective Gross Income)
Step 2: Subtract Operating Expenses
Typical expenses for a 10-unit building:
- Property Taxes: $20,000
- Insurance: $6,000
- Maintenance/Repairs: $13,000 (approx. 8% of rent)
- Property Management: $12,000 (approx. 8%)
- Utilities (if landlord-paid): $15,000
Total Operating Expenses: ~$66,000/year
Step 3: Calculate NOI (Net Operating Income)
Effective Gross Income: $156,180
Minus Expenses: $66,000
NOI = $90,180/year
Step 4: Valuation Metrics
- Cap Rate: If the property is listed at $1.2M, then:
NOI ÷ Price = $90,180 ÷ $1,200,000 = 7.5% cap rate - GRM (Gross Rent Multiplier):
Price ÷ GSR = $1,200,000 ÷ $164,400 = 7.3 GRM
Both are strong indicators compared to higher-priced markets like Toronto (where cap rates are often under 4%).
Step 5: Financing with CMHC MLI Select
Here’s where Alberta gets even more interesting. With CMHC MLI Select, this 10-unit could qualify for:
- Up to 95% LTV financing
- Amortization up to 50 years
- Lower interest rates than conventional loans
This means lower down payments, lower monthly payments, and higher cash flow.
Step 6: Cash Flow Projection
Assume financing at 4.5% interest, 50-year amortization, 85% LTV:
- Loan: $1,020,000
- Monthly mortgage payment: ~$4,800
- Annual debt service: ~$57,600
Cash Flow = NOI ($90,180) – Debt Service ($57,600) = $32,580/year
= $2,715/month net cash flow
The Investor Advantage in Edmonton
Compared to other provinces:
- No rent control in Alberta → landlords can adjust rents to market annually.
- Simpler eviction laws → easier to manage problem tenants.
- Affordable entry prices → lower per-unit costs, higher cap rates.
This combination makes Edmonton and Calgary a playground for investors ready to scale.
The Bottom Line
A 10-unit building in Edmonton isn’t just a theoretical exercise; it’s a real-world example of how Alberta’s affordability, rental demand, and financing options create powerful investment opportunities.
For investors ready to grow from duplexes to 10 units and beyond, Green Casa provides the guidance, management, and expertise to turn numbers on paper into wealth in reality.
