Cap Rate and Rental Yield on a Burnaby Condo in 2026

Almost every investor client asks me the same question: "what's the cap rate on this unit?" Half the time the number they've already worked out in their head is wrong, not because they're bad at math, but because gross rent divided by price isn't a cap rate. It's a starting point, and the gap between that starting point and the real number is where most first-time investors get surprised.

Here's the method, run on a real Burnaby purchase price, with the assumptions labeled so you can plug in your own numbers.

Gross yield, net yield, and cap rate aren't the same thing

These three terms get used loosely, and mixing them up is how a condo ends up looking like a better deal than it really is.

Gross rental yield is the simple one: annual rent divided by purchase price.

Gross yield = (annual rent ÷ purchase price) × 100

It ignores every cost of owning the place, so treat it as a quick screening number, nothing more.

Net operating income (NOI) is annual rent minus your operating expenses, before your mortgage payment.

NOI = annual rent − operating expenses

Net rental yield, usually just called the cap rate, divides that NOI by the purchase price.

Cap rate = (NOI ÷ purchase price) × 100

Notice what's missing: your mortgage. Cap rate measures how the property performs on its own, as if you'd bought it in cash, which lets you compare a $695,000 condo against a $1.8 million detached house or a multiplex on the same basis. Once you know the cap rate, you layer your actual financing on top to see real cash flow.

What actually counts as an operating expense

This is where people forget real costs, or count ones that don't belong.

In the operating expense line:

• Strata fee. Covers building insurance, shared utilities, landscaping, the reserve fund, and common-area upkeep. On a two-bedroom Burnaby condo this typically runs $400 to $700 a month.
• Property tax. Set against BC Assessment's value for the unit. For a condo around $700,000, expect roughly $150 a month, though your actual bill depends on the year's mill rate.
• Landlord insurance. Covers interior finishes, appliances, and your liability as a landlord (the strata's master policy covers the building itself). Usually $40 to $75 a month.
• Vacancy allowance. Even a good tenant leaves eventually, and there's a gap before the next one. Build this in as a percentage of gross rent, not full occupancy every month.

What does not belong here: your mortgage payment (financing, not operating), and major capital costs like a special levy for a roof or envelope repair. Those matter to your actual return, but they sit outside the cap rate calculation, which measures the property's operating performance alone.

A worked example: a Burnaby condo in 2026

Here's the math run on real numbers where I have them, and clearly labeled assumptions where I don't.

Assumptions and sources: the $695,200 purchase price is the real Metro Vancouver apartment/condo benchmark for June 2026, from the Greater Vancouver REALTORS Monthly Market Report. The $2,300 monthly rent is an illustrative figure for a two-bedroom unit, set within the range CMHC and rentals.ca report for Burnaby (CMHC's 2025 Rental Market Report put the average two-bedroom purpose-built rent for the Vancouver CMA at $2,363). Strata fee, property tax, and insurance are typical figures for a condo at this price point, not measurements of one specific unit. The 3.7% vacancy allowance uses the real Metro Vancouver vacancy rate CMHC reported in 2025, the highest in more than 30 years. This is a worked example to show the method, not a quote on any particular listing.

The gap between gross yield (4.0%) and net yield (2.5%) is a percentage and a half, made up entirely of costs that are easy to skip when you're eyeballing a listing. And that net number still sits before your mortgage payment. Add debt service at current rates and most Burnaby condos are cash-flow negative or close to break-even in year one. For most buyers, the return comes from mortgage paydown and appreciation, not monthly cash in your pocket.

What a realistic return looks like right now

A 2.5% net yield sounds low next to a GIC, and on pure income it is. What a condo offers instead is leverage (you control a $695,000 asset with a fraction of that in cash), a tenant paying down your mortgage principal, and long-run appreciation in a supply-constrained market next to transit.

The honest range for Burnaby condos in 2026 is roughly 3 to 4% gross and 2 to 2.5% net, and that range has slipped over the last two years as rents softened while prices stayed elevated. A detached house typically runs lower again (2 to 2.5% gross), since its price carries a land-value premium that has little to do with rental income. A multiplex built to current zoning can produce a meaningfully higher cap rate, often 4.5% to 6.5% on completed value, but it comes with construction risk, a much larger capital outlay, and a longer timeline before any unit is rented.

Location inside Burnaby moves the number too. A transit-hub spot like Metrotown commands higher rent in dollar terms, but the purchase price runs high enough that the yield often lands at or below the citywide average. Lower-priced areas relative to achievable rent can produce a better gross yield, at the cost of prestige and some appreciation upside.

None of this means don't buy. It means go in with the real number, not the one that only counts the rent.

Key Takeaways

• Gross yield is annual rent divided by price. Net yield, or cap rate, subtracts real operating expenses first: strata fee, property tax, insurance, and a vacancy allowance.
• Your mortgage payment and major capital repairs are not operating expenses. They matter to cash flow, but sit outside the cap rate formula.
• In the worked example, a $695,200 Burnaby condo (the real June 2026 GVR benchmark) produces roughly a 4.0% gross yield and a 2.5% net yield, using illustrative rent and expense figures grounded in CMHC and GVR data.
• The honest range for Burnaby condos in 2026 is about 3 to 4% gross and 2 to 2.5% net. Detached houses run lower, multiplex development can run meaningfully higher.
• A condo's return today comes mostly from mortgage paydown and appreciation, not monthly cash flow. Underwrite it that way.

Frequently Asked Questions

What is a good cap rate for a Burnaby condo?

In 2026, a net cap rate of 2 to 2.5% is typical for a Burnaby condo, with gross yield running 3 to 4% before expenses. Anything meaningfully above that usually means an unrealistic rent assumption, a low purchase price, or an expense line missing something, like the vacancy allowance.

Does cap rate include the mortgage payment?

No. Cap rate measures net operating income against purchase price, as if the property were bought with cash. Your mortgage payment is a financing cost, not an operating cost. Calculate cap rate first, then layer your actual financing on top to see real cash flow.

What operating expenses should I include when calculating rental yield?

Strata fee, property tax, landlord insurance, and a vacancy allowance are the core four for a Burnaby condo. Some investors also add a property management fee (typically 8 to 10% of gross rent, if not self-managing) and a small repair reserve for in-suite items the strata doesn't cover.

Is gross yield or net yield more useful when comparing properties?

Net yield is more useful for comparing two specific properties, since it accounts for real differences in strata fees, tax, and other carrying costs between buildings. Gross yield works as a first-pass screening tool, but don't make a purchase decision on it alone.

This article is one leg of the Burnaby investment property guide. For rent and yield data by neighbourhood, see rental income and cap rates by neighbourhood.

Sources

• Greater Vancouver REALTORS: Monthly Market Report, June 2026: apartment/condo benchmark price of $695,200.
• CMHC: 2025 Rental Market Report: Vancouver CMA average two-bedroom purpose-built rent of $2,363, and the Metro Vancouver vacancy rate of 3.7%, the highest in more than 30 years.
• Rentals.ca: Burnaby rental listings and market data: current Burnaby rent ranges by bedroom count, used to sanity-check the illustrative rent in the worked example.

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If you're weighing a Burnaby condo as a rental investment, I'll run the real numbers on any unit you're considering: actual strata fees, actual tax bill, and a rent estimate grounded in comparable rentals, not a guess. Start with a free property valuation if you're pricing an exit or a purchase, or reach out directly to talk it through. You can also call or text me at 778-991-0051.

Jersey Li, The Apartment Guy® · Medallion Club Member (Top 10% REALTOR®, 2024 & 2025) · Jersey Li Personal Real Estate Corporation, Sutton Group - 1st West Realty.