ImmoMulti — direct buyer of multiplexes on the North Shore — uses four key indicators to evaluate every income property: the GRM (gross revenue multiplier), the cap rate (taux global d'actualisation), real cash flow, and the DCR (debt coverage ratio). On the North Shore in 2026, a healthy cap rate typically falls between 5% and 7% depending on the city and property condition, and a DCR of at least 1.2 is required by most lenders. A property listed at $900,000 means nothing without its numbers: two properties at the same price can have opposite yields depending on their revenues, expenses, and financing. This guide explains how to calculate each of these indicators and how to interpret them to make an informed buy or sell decision.
Why isn't price alone enough to evaluate an income property?
An income property is valued first and foremost by its numbers, not its appearance. Two properties at the same price can have opposite yields depending on their revenues, expenses, and financing. The four indicators below are built from two key figures:
- Gross revenue: the total of annual rents (plus parking, laundry, etc.).
- Net operating income (NOI): revenues minus expenses (taxes, insurance, utilities, maintenance, management, vacancy), before the mortgage.
What is the GRM and how do you calculate it for a multiplex?
The GRM (gross revenue multiplier) is the fastest filter. It compares the price to gross revenue:
A property at $900,000 generating $90,000 in gross revenue has a GRM of 10. The lower the GRM, the more quickly the property "pays for itself" through rents. It's useful for quickly ruling out an apparent bargain, but the GRM ignores expenses — which is where the cap rate comes in.
What is the cap rate and what role does it play in evaluating a multiplex?
The cap rate (taux global d'actualisation) is the benchmark indicator. It relates net income to price:
An NOI of $54,000 on a $900,000 property gives a cap rate of 6%. Unlike the GRM, the cap rate accounts for expenses — making it a far more honest measure of yield. It also allows you to compare properties directly, regardless of their size.
How do you calculate the real cash flow of an income property?
Cash flow is the bottom line. It's what remains after the mortgage is paid:
If the NOI is $54,000 and the mortgage costs $45,000 per year, cash flow is $9,000. Positive cash flow means the property "pays for itself" and puts money in your pocket. Negative cash flow means you have to inject money every month — a red flag.
What is the DCR and why do banks require it?
The debt coverage ratio (DCR) is primarily of interest to the lender. It measures the safety margin:
A DCR of 1.2 means $1.20 of net income for every dollar of payment. Banks generally require a minimum of 1.1 to 1.25 for an income property. Below that, financing becomes difficult.
Full worked example: yield calculation for a 6-plex
Let's put it all together for a 6-plex listed at $850,000:
| Data | Value |
|---|---|
| Annual gross revenue | $78,000 |
| Expenses (≈ 30%) | $23,400 |
| Net operating income (NOI) | $54,600 |
| Annual debt service | $45,800 |
| GRM | 850,000 ÷ 78,000 = 10.9 |
| Cap rate | 54,600 ÷ 850,000 = 6.4% |
| Cash flow | 54,600 − 45,800 = +$8,800 |
| DCR | 54,600 ÷ 45,800 = 1.19 |
Verdict: a cap rate of 6.4%, positive cash flow, and a DCR close to 1.2 make this 6-plex a reasonable purchase. Our deal analyzer calculates all four indicators at once and delivers an instant verdict.
The underestimated-expenses trap
Most "good deals" that go sideways come from undervalued expenses: overly optimistic vacancy rates, unaccounted management fees, overlooked major maintenance. Always normalize your expenses to a conservative level before calculating the NOI.
What GRM, cap rate, and DCR benchmarks should you target for a good yield?
| Indicator | Prudent benchmark (North Shore) |
|---|---|
| GRM | Lower is better (typically 8 to 12) |
| Cap rate | 5% to 7% depending on the area |
| Cash flow | Positive, ideally > $100/unit/month |
| DCR | ≥ 1.2 to maintain a safety margin |
These benchmarks are not absolute rules: a well-located property with optimization potential may justify a lower cap rate. The key is to always run the numbers before making an offer. Want to sharpen your instincts? Try the Guess the Plex Price game and see whether your estimates hold up. Once you've validated the yield, also consider your financing, which directly affects cash flow and the DCR.
