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The Top 3 Metrics Every Real Estate Investor Must Know
About this Episode
Nick and Dan break down the essential metrics every Canadian real estate investor needs to master: cap rate, DSCR, cash-on-cash return, and IRR. Using a detailed Hamilton duplex example, they demonstrate how to calculate each metric, explain what they reveal (and what they don't), and show how to use them strategically—from quick property screening to deep financial modeling.
- Cap rate is your screening tool: Perfect for quickly comparing properties across markets, but it doesn't account for financing or long-term performance.
- DSCR and cash-on-cash reveal actual profitability: These metrics show whether your property will make or lose money with financing—the Hamilton example had a terrible 0.61 DSCR and -10.5% cash-on-cash return.
- IRR captures the complete picture: It's the only metric that accounts for the entire investment lifecycle including appreciation, principal paydown, and your exit, showing you can still profit even with negative annual cash flow.
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