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Development, Financial Model, Investment, Real Estate, Residential Properties

10-year Financial Projections, Amortization, Break-Even, Budget, Budgeting, Cash Flow Analysis, Cash Flow Projections, Cash on Cash Yield, Chart, Cost Calculation, Cost Projections, Dashboard, Debt Amortization, Discount Rate, Excel, Financial Analysis, Financial Due Diligence, Financial Feasibility, Financial Model, Financial Modeling, Financial modelling, Financial Planning, Financial Projections, Financial Ratios, Financing, Forecast, Forecasting, Investment Multiple, Investor Cash Flows, Investors, IRR (Internal Rate of Return), KPIs (Key Performance Indicators), Loans, Mortgage, NPV (Net Present Value), Passive Income, Payback Period, Pro-Forma, Property Appraisals, Property Valuation, Real Estate Valuation, Refinancing Scenario, Rental Income, residential properties, Return on Investment (ROI), Revenue Projections, Scenario Analysis, Sensitivity Analysis, Uses and Sources of Funds

Thinking about a laneway house, garden suite, coach house or backyard suite? The build costs a quarter of a million dollars or more, and the real questions are Canadian: can you fund it with CMHC’s insured refinance for adding a suite, or is a HELOC cheaper; what does refinancing your existing mortgage really cost; how much tax will you pay on the rent and, years later, on the sale; and is the suite worth what it costs? Generic ADU calculators are American, ignore your existing mortgage and stop at a simple payback. This Excel model answers those questions year by year, after tax, by comparing your home with the suite against your home without it.

Why this model

Everything is incremental: only the cash that changes because you build counts. If you refinance, the new mortgage replaces the old one, so the model charges you the difference in payments, the prepayment penalty and the CMHC premium, not the whole mortgage. Every default is a published figure or a Canadian rule, cited on a Sources tab, and the gaps are labelled as template assumptions so you know what to replace.

Canadian rules built in

CMHC insured refinance to add a suite: up to 90% of the lending value (the lesser of the as-improved value or the as-is value plus cost), below $2,000,000, up to 30 years, construction money only; above the cap the model switches to an 80% uninsured refinance
CMHC premium on the whole loan, or the lower of the total-loan and increase methods when your existing mortgage is already insured, with the 0.20% surcharge over 25 years and Ontario PST on the premium; uninsured refinances above the $2,000,000 cap carry a rate premium
HELOC alternative sized to the 65% revolving and 80% combined limits, with interest-only payments
Semi-annual mortgage compounding for both the existing and the new mortgage, and the prepayment penalty for breaking the existing one
Interest deductible only on borrowing traced to a rented unit, financing fees over five years, and CCA Class 1 that cannot create a rental loss
The deemed disposition when part of your home becomes a rental: gains before completion stay tax-free, later gains on the rented share are taxed at the 50% inclusion rate, with CCA recapture
GST/HST self-supply as a switch, with the federal new residential rental property rebate; the multigenerational home renovation tax credit for a family suite

Four deal structures, six cities, three scenarios

Switch between: renting the suite with a CMHC refinance; renting the suite with a HELOC and savings; moving into the suite and renting the main house; and a family suite for a parent or adult child, which also shows the avoided cost of their other housing. Presets cover Calgary, Edmonton, Toronto, Ottawa, Vancouver and Victoria (home values, build costs, servicing, permit fees, development charges, rents, property tax, sales tax and tax rates), plus a Custom column. Each runs in Downside, Base and Upside markets.

Two editions

Feasibility Edition: annual model to 30 years with the construction budget, financing, operations, tax and incremental cash flow, all four structures, six city presets, scenarios, after-tax IRR, NPV, yield on cost, value created, break-even rent, payback, profit sources, a dashboard and integrity checks.
Due Diligence Edition: everything in the Feasibility Edition, plus:
lender qualification with the stress test, GDS and TDS including the suite rent
after-tax IRR and NPV for every possible sale year
all four structures and all six cities side by side, each a full live copy of the model
twelve live sensitivity cases with a tornado chart

Key outputs

After-tax and pre-tax IRR on your cash, after-tax NPV, equity multiple, total profit and unlevered IRR
Construction budget per square foot, total project cost, value added and value created on completion, owner’s cash at the build
Year-1 rent, NOI, yield on cost, extra debt service, monthly cash flow, debt coverage and break-even rent
Where the profit comes from: rent, the suite’s value at sale, construction, financing, incentives and tax
Dashboard charts: project cost by item, after-tax cash flow by year, suite value against the extra debt, profit sources

Built to modeling best practice

Inputs, calculations and outputs on separate sheets; inputs blue on yellow, formulas black, cross-sheet links green
One formula per row for years 1 to 30; no macros, no circular references, no hidden or protected sheets, no external links
Checks sheet rebuilds the owner’s cash item by item, cross-checks the mortgages against Excel’s PMT and CUMIPMT, confirms every loan is fully repaid and no cash flows remain after the sale, ties profit sources to the total and validates selectors; it warns about city size limits, the insured-loan cap, negative cash flow and Calgary’s zoning change
Contents sheet with links, step-by-step instructions, a glossary and a full source list

Default assumptions

Defaults describe a 750 sq ft two-bedroom backyard suite behind a Calgary detached home at the CREB benchmark of $739,400 (September 2026), with a $350,000 existing mortgage, Calgary permit fees, a 2-bedroom rent from CMHC data plus a 5% new-build premium, Calgary property tax and October 2026 mortgage and prime rates. The construction budget comes to $241,358, or $322 per sq ft. With the CMHC refinance on a home whose existing mortgage is not insured, year-1 pre-tax cash flow is $701 a month, the yield on cost is 7.4%, NOI covers the suite’s own debt service 1.38 times and the after-tax IRR on the owner’s cash is 18.3% over a 10-year hold. The suite is assumed to add 90% of its cost to the home’s value, so value created on completion is -$30,351: the profit comes from rent and leverage, not from an instant appraisal gain. With the same plan, Ottawa shows a negative after-tax NPV at the defaults, which is the honest picture there. Replace the defaults with your builder’s quote, your mortgage statement and an appraisal.

Compare the editions

The free PDF demo, the Feasibility Edition ($69) and the Due Diligence Edition ($129) side by side:

Canadian Laneway and Garden Suite Financial Model: comparison of the Free PDF Demo, Feasibility Edition and Due Diligence Edition

What you get

One Excel workbook (.xlsx) for the edition purchased, built only with functions available since Excel 2010 (no dynamic arrays, no macros)
A free PDF demo showing the main sheets of the Due Diligence Edition

Support and customization

Questions about how the template works are answered by email. Launchwright can also adapt the model to your property, lender or portfolio, quoted at a fixed price in writing before work begins. Contact details are inside the model.

Important

This template is for planning and illustration. It is not investment, tax, legal, planning or mortgage advice. Zoning, incentives, tax and insurance rules change; confirm them with your city, accountant and lender.

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