Guide · Canada

How to screen a deal on realtor.ca

Q: What is the 1% rule and does it work in Canada?

The 1% rule says the monthly rent should be at least 1 percent of the purchase price. Many Canadian listings fail it because prices are high relative to rent. It is a fast screen, not a verdict. A property at 0.67 percent is a single-tenant deal that likely will not cash flow on its own.

Built by Nate Rempel, a Canadian real estate investor. The math is golden-tested to the penny against a CPA-audited spreadsheet.

You will look at a hundred listings to find one worth buying. The skill is screening fast, so you do not waste an evening on a deal that never had a chance. This guide shows the quick checks that kill or keep a listing in under a minute. Then run a real one yourself, no signup.

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Read the listing like an investor, not a buyer

A listing is a sales document. It shows the property in its best light, which means the rent claim is high and the costs are missing. Your first job is to read past the polish. Note the asking price, the unit count, and any rent the listing claims. Then check the photos against the description. If the listing says triplex but you can only count two doors, that gap matters. One investor's near-miss came from a listing that said one unit when the property had four.

Check the rent against a real comp

The rent drives the deal, so confirm it before anything else. Pull a rent comp for the same area and unit type. A listing claiming $2,800 a month might really rent for $2,500, and that $300 changes the answer. For a multi-unit, get the rent per unit. If the listing quotes a sitting tenant's rent, remember a provincial rent cap may limit how fast you can raise it. The rent you can actually collect is the number that counts, not the one in the photo caption.

Run a one-minute screen

Now apply a fast rule to keep or kill it. Two common ones:

The 1% rule. Monthly rent should be at least one percent of the price. Many Canadian listings fail this because prices run high against rent. A property at 0.67 percent is a single-tenant deal that likely will not cash flow alone.
A rough cap rate. Take the rent, knock off a third for expenses and vacancy as a quick estimate, divide the yearly figure by the price. Under four percent in most markets, look harder before you go deeper.

These are screens, not verdicts. They tell you which listings deserve the full math. Our 1% rule calculator and cap rate calculator run these in seconds.

Spot the Canadian gotchas

Before you spend real time on a listing, check the things that quietly sink Canadian deals. Property tax runs off the city mill rate, and a high-tax city can erase the cash flow a low-tax city would keep. A new build can carry GST a resale does not. A sitting tenant under a rent cap limits your upside. None of these show up in the listing photos, so you have to look for them on purpose.

Decide: deep dive or move on

After the quick screen, you have two outcomes. The listing fails the rough numbers, so you move on without regret. Or it passes, and it earns the full analysis: real cap rate, cash flow after the mortgage, the DSCR your lender will use, and the CMHC paths. Screening this way means you spend your deep-dive time only on deals that could actually work, instead of grinding through every listing in the city.

Screen the listing you are looking at

Paste a realtor.ca listing into BrickROI and the Canadian property data fills in the rent comps, the property tax from the mill rate, and the costs. You see the cap rate, the 1% check, the cash flow, and the DSCR in two minutes, built for Canadian rules. Screen the one in front of you right now.

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Questions investors ask

How do I screen a rental deal quickly?

Read the listing for the real rent and the unit count, run a quick rule like the 1% rule or a rough cap rate, and check the property tax for the city. If it fails the rough numbers, move on. Only go deep on the listings that pass the quick screen.

What is the 1% rule and does it work in Canada?

The 1% rule says the monthly rent should be at least one percent of the purchase price. Many Canadian listings fail it because prices are high relative to rent. It is a fast screen, not a verdict. A property at 0.67 percent is a single-tenant deal that likely will not cash flow on its own.

What gotchas should I watch for in a listing?

An overstated rent, a unit count that does not match the photos, a high city property tax, and a sitting tenant under a rent cap. Listings make the deal look as good as possible, so confirm the rent against a comp and the property tax against the city mill rate before you trust the math.