Guide

How to evaluate a potential investment

By Jodi Bernard, PEI REALTOR®, CENTURY 21 Northumberland Realty. Updated October 12, 2026.

Do not judge a cottage, a waterfront house, and a city rental with the same spreadsheet. Use the same five headings, and change the assumptions under each one.

Income

Rent, seasonal revenue, or none. Then vacancy. A cottage that is empty from October to May is not a failure of marketing. It is the calendar. Other income counts only if someone pays it.

Debt

Down payment, rate, amortization, and whether the lender wants mortgage insurance. Debt is not an operating expense. It belongs in cash flow after you have a cap rate, not inside it.

Operating costs

Tax, insurance, utilities the owner pays, management, cleaning, and ordinary repairs. Get an insurance quote. Do not copy a percentage from a property in another province.

Reserves

Roof, heat, septic, well, windows, and, on the shore, stairs and bank work. A reserve is not pessimism. It is the year the building asks for money the guests did not cover.

Exit

Name the next buyer: a family who wants July, a local resident, or another investor. If the only exit is “prices rise,” you do not have an exit. You have a hope.

This is educational, not legal, tax, or lending advice. Ask Jodi Bernard about a specific property.