08/13/2026
Cap rate is one number that tells you what an investment property actually does, not just what it costs.
Cap rate is the annual return a property generates on its purchase price, before financing. Think of it like the interest rate on a savings account. Deposit your money, earn a percentage each year. A rental property works the same way, except the "interest" is the net operating income the building throws off after expenses.
The math is straightforward. Take the net operating income, the rent left over after operating costs, and divide it by the purchase price. A property pulling $60,000 in net operating income on a $1M price runs a 6.0% cap rate. Drop the income to $45,000 on that same price and you're at 4.5%.
That's why the number matters when you're evaluating any investment property in Calgary. Sticker price tells you what a property costs. Cap rate tells you what it yields.
It also lets you compare properties on equal footing. A lower purchase price with thin income can work less hard for you than a pricier property throwing off strong returns. Cap rate puts everything on a yield basis so you can weigh them side by side.
We run cap rate analysis on every investment property we bring to our clients across Calgary. Purchase price is the start of the conversation, not the end of it.
If you're looking at an investment property in Calgary and want a straight read on what it's actually yielding, DM us.
