Commercial Investment Underwriting
One property.
Six decision lenses.
Move from potential rent to NOI, cash return, coverage, leverage and break-even occupancy without hiding the assumptions.
One stabilized year
Expose the income stack.
Use property- and lender-specific figures. All calculations remain in this browser.
Property-level underwriting
Income statement
- Vacancy and credit loss
- ($21,000)
- Effective gross income
- $419,000
- Net operating income
- $284,000
- Expense ratio
- 32.22%
- Cash flow before tax, after debt and reserve
- $54,000
- Modelled cash invested
- $1,580,000
Return, coverage and leverage
- Going-in cap rate
- 7.10%
- Cash-on-cash return
- 3.42%
- Property DSCR
- 1.39×
- Debt yield
- 10.92%
- Loan-to-value using purchase price
- 65.00%
Downside and reverse scenarios
- Break-even occupancy before reserve
- 76.19%
- Break-even occupancy after reserve
- 82.14%
- Value at entered target cap rate
- $4,369,231
- Debt service at entered target DSCR
- $227,200
Vacancy is applied to gross potential rent; entered other income is treated as recurring and independent. NOI equals effective gross income less operating expenses and excludes debt service, the entered capital reserve, income tax and CCA. Break-even occupancy subtracts other income and is shown both before and after the entered reserve. Negative values are possible and should not be interpreted as approval, value or advice.
Calculation architecture
One model.
Different questions.
Property operations. Gross potential rent less vacancy, plus entered other income, produces effective gross income. Operating expenses are then subtracted to calculate modelled NOI.
Return. Cap rate compares NOI with purchase price. Cash-on-cash return compares cash flow after entered debt service and capital reserve with modelled cash invested.
Credit and downside. Property DSCR compares NOI with annual debt service; debt yield compares NOI with loan amount; LTV compares loan amount with purchase price; break-even occupancy estimates required rent collection under the entered cost structure.
Primary methodology sources
Definitions first.
Judgment stays human.
This general-information tool is not an appraisal, valuation, lending decision, financing service, accounting or tax calculation, or investment recommendation. CMHC sources provide Canadian definitions and research context; the U.S. OCC handbook is identified as foreign supervisory guidance and is used only for transparent CRE ratio definitions. Confirm all inputs with the appropriate Canadian professionals and lender.
CMHC: 2024 Canadian Rental Housing Development Survey ↗Appraisal Institute of Canada: CUSPAP 2024 ↗U.S. OCC: Commercial Real Estate Lending Handbook ↗BDC: business debt service coverage ratio ↗Build the commercial property pro forma →Understand property DSCR and debt yield →Submit an investment requirement →Questions
Before relying
on the output.
What does this commercial property investment calculator measure?
It models one stabilized year of potential rent, vacancy, other income, operating expenses, NOI, debt service, capital reserve and cash invested. It then calculates cap rate, cash-on-cash return, property DSCR, debt yield, LTV and break-even occupancy from the entered assumptions.
Is NOI the same as cash flow?
No. In this tool NOI is effective gross income less property operating expenses before debt service and the separately entered capital reserve. Cash flow before tax then subtracts annual debt service and that reserve.
Does the calculator determine commercial mortgage approval?
No. Lenders may normalize income and expenses, use their own value, underwriting ratios, debt service and borrower analysis. The result is a screening scenario, not a term, approval or financing service.
Are the inputs submitted to Commercially?
No. Calculator inputs remain in the browser. Only a separate form that the user intentionally submits creates an inquiry.
Calculator inputs remain in your browser and are not submitted to Commercially. Only a form you intentionally submit creates an inquiry.
Prepared by: Commercially Research & Editorial. Commercial review: Slav Loban, Commercial Real Estate Division Leader. Reviewed August 26, 2026. Corrections: hello@commercially.ca.