Can You Get Positive Cash Flow in KW & Cambridge Markets?

Today, we’ll be discussing what to expect for cashflow when buying investment property in the Kitchener-Waterloo & Cambridge area. To answer the question, rental cashflow in most cases in the local market is neutral, or even slightly negative.

However, there is more to it than just that. A neutral balance happens when the rental income is enough to cover the mortgage and other costs associated with the property (including taxes).

In the neutral case, the cashflow that’s left is zero or close to zero. However, that doesn’t mean that you’re not making profit or getting a worthwhile return.

So where does it become worthwhile? The main benefit comes from the equity built up in the property by having the mortgage paid off by rental income, as well as the increase in property value as prices in the real estate market steadily go up over time.

Taking these into account, “zero” cashflow starts to not sound so bad. Another great win is when you are able to pay your mortgage loan sooner. The main benefit here is that making additional payments lowers the total amount of interest paid over time on your mortgage.

Interest payments can be easy to underestimate but they accumulate and snowball substantially over the years. Striving to pay ahead and get your mortgage out of the way sooner, can add a lot to your bottom line in the long run, so it’s definitely worth considering.

Last but not least, once your mortgage is fully paid off, then the rental income truly becomes a positive source of cashflow, which is a welcome bonus to the return from equity built up over time along with increase in resale value over time.

Multi-Unit Properties

If you are looking to gain positive cashflow sooner rather than later, there are some other strategies you can use.

Investing in multi-family, or multi-renter properties makes a big difference in increasing the monthly income coming from rent. This is because the sum of multiple rental income sources (from the same building) often ends up being larger than the mortgage and associated costs for the building itself.

Larger properties with more units will of course come with higher costs, but the income generated by having multiple renters surpasses the additional costs, putting you in the positive.

The reason for this is because having multiple renters in the same building makes more efficient use of the space and the property itself, increasing your income per square foot from renting, and therefore leading to higher cashflow.

This means that you can achieve the much desired positive cashflow, which you can enjoy directly, or you can reinvest it in paying off your mortgage sooner, which will lower those interest payments and increase your return in the long run.

That being said, a multi-family property can be a big management responsibility that might not be for everyone – as it involves a higher mortgage rate, and more tenants to manage.

Student Rentals

Renting out to multiple renters in a single property – for example like student rentals – may also be a way to create multiple sources of income from the same property, boosting cashflow into the positives.

Renting a house or an apartment by the room maximizes the rental income of a single building, where the separate individual room rentals add up to a higher income than the same property rented for a single tenant or family.

However, what we need to keep in mind here is that renting to students can’t happen anywhere in the city, as students need to rent around their colleges and universities.

Access to public transportation also plays a huge role in these cases, so the location of the property is important here.

Lastly, the more tenants you’ll be dealing with, the more responsibility you’ll have, and the more turnover, or vacancy you may be dealing with, which adds to the risk and workload associated with your bottom line.


At the end of the day, every option has its benefits and its drawbacks. As an investor you’ll need to compare the pros and cons of renting out to a single family or tenant, managing multiple units, or renting out multiple rooms to a handful of students.

There’s more cash to be had with more tenants, but also more responsibility and more risk incurred.

Whichever path you might take, the Kitchener-Waterloo & Cambridge area has no shortage of opportunities when it comes to real estate investment, so take a look at what’s out there, and don’t hesitate to contact us if you have any real estate questions.