Investing in a multi-family property is more than just a gut feeling or a market trend; it’s about running the numbers and making sure the math works for you. In this blog, we’re walking through how to properly evaluate a 10-unit rental property in Edmonton, using a simple framework and real market figures.
Step 1: Estimate Rental Income
Let’s say you’re looking at a 10-unit apartment building in a mid-demand neighborhood in Edmonton. If each unit rents for $1,250/month (which aligns with Edmonton’s average rent for a basic 1-bed or 2-bed apartment), your monthly gross rental income would be:
📌 10 units x $1,250 = $12,500/month or $150,000/year
That’s your top-line income. But real estate is never about just income; it’s about what’s left after expenses.
Step 2: Calculate Operating Expenses
Typical annual expenses for a building like this might include:
- Property taxes: $18,000
- Insurance: $6,000
- Utilities (if landlord-paid): $12,000
- Repairs/Maintenance: $7,500
- Property Management Fees (8% of rents): $12,000
- Miscellaneous/Admin: $4,000
📌 Total Operating Expenses: $59,500/year
Step 3: Determine Net Operating Income (NOI)
NOI is your income after operating expenses, before mortgage payments.
📌 $150,000 (Gross Income) – $59,500 (Expenses) = $90,500 NOI
This is a powerful number; it shows the property’s earning potential without being distorted by your financing strategy.
Step 4: Cap Rate & Valuation
Let’s say the property is listed at $1.1 million.
📌 Cap Rate = NOI / Purchase Price = $90,500 / $1,100,000 = ~8.2%
In Edmonton, cap rates often range between 6.5–9%, depending on location and condition. An 8.2% cap is quite healthy.
Step 5: Cash Flow Analysis
If you finance the deal with a 25% down payment ($275,000) and borrow the remaining $825,000 at 5.5% over 25 years, your annual mortgage payment would be around $59,000.
📌 Cash Flow = NOI – Mortgage = $90,500 – $59,000 = $31,500/year or $2,625/month
That’s a strong monthly cash flow for a small apartment in a growing Alberta city.
Final Thoughts
Evaluating a rental property is all about turning speculation into strategy. Edmonton’s relatively low cost-per-unit and strong rental demand make this city an excellent target for smart investors. Always run your numbers, get familiar with local benchmarks, and use tools like cap rate and NOI to make confident decisions.
Green Casa is here to support you with property management insights and on-the-ground knowledge. Reach out to us if you’re ready to explore Edmonton’s multi-family opportunities.
