St. John's Properties
Buying & investment guides
A two-apartment listing can show attractive rental income and still need cash from its owner each month. To assess it, write down the rent you expect to collect, operating expenses, financing payments and money you will set aside for future work.
Begin with the existing rental agreements and the building's actual bills. Keep assumptions visible where documents are missing. That makes it easier to compare two properties and ask useful questions before an offer.
Choose the right model for your occupancy plan
If you will live in one unit, include rent only for the unit you will rent out. Work out your household's remaining cost of owning the property after that income and the rental expenses. Do not assign rent to your own unit and treat it as money available to pay the mortgage.
If both units will be rented, a whole-property cash-flow worksheet is useful. The example below uses that approach. It does not establish whether a lender will finance a particular property or which down payment it will require.
Work from rent you can support
Record the current rent for each occupied unit, what it includes and how it has been paid. If a unit is vacant, document the evidence behind your proposed rent and allow for the time and work needed to find a tenant.
For an occupied property, review the existing agreement with your lawyer. The provincial tenancy FAQ says an agreement generally continues through a sale. A projected higher rent is not the same as the income under the tenancy you would inherit. Newfoundland and Labrador tenancy FAQ
A worked example with visible assumptions
Every amount below is hypothetical. These figures are not current St. John's market rents, an insurance quote, a tax bill or a mortgage offer. They show how to organize a calculation for a property with both units rented.
| Monthly income and operating assumptions | Amount |
|---|---|
| Scheduled rent, unit A | $1,800 |
| Scheduled rent, unit B | $1,400 |
| Total scheduled rent | $3,200 |
| Vacancy and collection allowance, 5% | -$160 |
| Expected rent after that allowance | $3,040 |
| Property taxes | -$300 |
| Insurance | -$180 |
| Owner-paid utilities | -$150 |
| Routine repair allowance | -$160 |
| Management/administration allowance | -$160 |
| Net operating income before financing and capital reserve | $2,090 |
The operating allowances total $950. For comparison across properties, define the categories the same way each time. This example keeps routine repairs in operating expenses and a separate replacement reserve below.
Now add financing and that reserve:
| Financing and reserve assumptions | Monthly amount |
|---|---|
| Net operating income from above | $2,090.00 |
| Mortgage payment | -$2,093.78 |
| Reserve for major replacements | -$160.00 |
| Cash remaining after debt payment and reserve | -$163.78 |
The mortgage example assumes a $450,000 price, $90,000 down payment and $360,000 loan, at a hypothetical 5% nominal annual rate compounded semi-annually, amortized over 25 years with monthly payments. It excludes closing costs and assumes no financed insurance premium. Payment is calculated from those inputs and rounded to cents. A lender's payment and terms may differ.
Under these assumptions, the owner would contribute about $164 each month after the stated allowances. The $3,200 headline rent does not establish that the property would fund all its costs.
Test a difficult month
Monthly allowances are a planning device. Actual rent receipts and repairs arrive unevenly.
If unit B is empty for a whole month in this example, actual rent received is $1,800. Using that actual amount, the same $950 operating allowance, $2,093.78 debt payment and $160 replacement reserve leaves a $1,403.78 shortfall. The averaged $160 vacancy deduction is not applied again in this actual-month calculation.
Ask how you would fund that month and a repair arriving at the same time. Also test lower rents, a higher financing payment at renewal, and a larger replacement bill. Use quotes and component ages to decide which scenarios matter for the home you are considering.
Keep cash flow, equity and tax separate
The mortgage payment includes principal and interest. The full payment leaves your bank account, so the worksheet includes it in monthly cash flow. Principal repayment reduces the loan balance; it is not current rental income.
Tax calculations follow different rules. The CRA says mortgage principal repayments are not deductible rental expenses, and personal-use expenses must be separated when you live in part of the property. Ask your accountant how the rules apply to your ownership and use. CRA rental expenses that cannot be deducted
This example does not estimate appreciation, sale proceeds, income tax or a complete investment return. Those require additional assumptions and costs.
Questions to settle for the actual property
- Which rent amounts are established by current agreements?
- Which utilities and services are the owner's responsibility?
- Is the insurance quote based on the intended rental use of both units?
- Which components are likely to require major work, and when?
- Is management included in your budget, even if you expect to do it yourself?
- How much cash remains after down payment, closing expenses and initial work?
- Has the lender confirmed financing for your actual occupancy plan?
Common questions
Is a two-apartment home a good investment if rent covers the mortgage?
Complete the expense and reserve calculation first. A mortgage-only comparison leaves out costs that affect what cash the property will require from you.
Can I leave out vacancy because a tenant is already there?
Review the current tenancy, but also plan for changes during your ownership. Use a vacancy assumption you can explain and test an actual empty month.
How much should I reserve for replacements?
Use the condition and expected work at the specific property. A fixed amount in an example cannot establish the reserve needed for an older roof, shared heating equipment or another major component.
Take the worksheet to a real listing
Explore two-apartment homes and shortlist properties through the matching tool. Then contact Felix with the listing link and whether you intend to occupy a unit. Ask which rental, utility and property documents are available so you can replace the sample figures with evidence for that home.
Behind the guide
Sources & further reading
Official references researched on October 15, 2026. Confirm the requirements that apply to your property and financing with the relevant provider.
