How to Find the Best Investment Properties In Toronto!

Before we show you great investment properties in Toronto, let’s talk about how you make money with real estate, so you know what to look out for.

How Do You Make Money On An Investment Property?

There are four ways to make money with an investment property:

Principal Paydown

A part of every mortgage payment goes towards paying down your loan principal (so you owe less to the bank and own more of the investment property). 

It’s like part of your rental income from your investment property goes into a forced savings plan that adds up over time, and this part boosts your total investment property returns.

Long-Term Appreciation

Over time, real estate tends to appreciate, despite short-term ups and downs.

In Toronto, entering the investment property market can be pricier, typically requiring a minimum of $250,000 of investment capital for a house (for a 20% downpayment and closing costs). 

But if real estate investors can afford this, many are drawn to Toronto due to its strong and stable appreciation, averaging around 7% per year over the past two decades.

 

This consistent growth makes Toronto’s real estate means better returns and lower risk when you want to cash out and take profit.

Toronto Market Appreciation vs. Major Canadian Cities

 

While good rental income is always important, experienced real estate investors often prioritize better appreciation potential. 

Why? When selling, only half of the capital gains are taxed, offering a better tax structure. And when you don’t want to sell your investment property, you can access the gains through mortgage refinancing without facing substantial transaction fees or paying taxes.

Value-Add Gain

Adding value to your investment property through renovations is called value-add gain, and it can be quite rewarding. 

But here’s the thing – it’s not for everyone. It takes time, effort, and renovation risk. 

The amount of value-add gain you get depends on the renovations you choose (aim for maximum return), the people you hire, and how well the project is managed (which gets better with experience).

Cash Flows

Cash flow is the extra money you might get each month you get after paying all the property bills and the mortgage.

We like to be smart about it, aiming for at least breaking even (net zero cash flows), so we don’t have to worry about covering monthly property payments (negative cash flows). The more money you make from your investment property, the better your cash flows can be, which can mean better overall real estate investment returns too.

This is the main deal for some real estate investors – those looking for financial freedom and a break from the 9-5 grind often work towards getting big cash flows from their rental properties.

Their goal? To have these real estate investments bring in enough income to eventually replace their day job pay.

a Sneak Peek at A Toronto Investment Property We're Eyeing

Actual returns may vary depending on assumptions.  Read our definitions and assumptions.

Get In Touch With The Toronto Real Estate Investing Pros!

Learning about investment properties is a good start, but the real magic happens when you actually take action. 

We’re here to walk you through how we find the best Toronto investment property deals, compare different real estate investment options, and show you what kinds of renovations can add the most value. 

If you’re wondering how we pick the best investment property opportunities in Toronto, just reach out.

What Toronto Real Estate Investment Is Right For You?​

Check out our complete Toronto real estate investment guide for all the details and real-life examples. If you’re ready to dive in, just book a call with us!

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