How much do you need to invest in Toronto real estate, and what income is required to qualify for a mortgage? When purchasing a Toronto investment property, it’s crucial to have enough saved for the down payment, closing costs, and any upgrades.
Try our calculator to get a clear idea of how much you’ll need to start your investment journey.
Please use these numbers as a best estimate only. Toronto & Ontario Land transfer Tax is based on Toronto properties with not more than two single family residences purchased on or after March 1, 2017. Income requirements calculated based on a TDSR of 44%.
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!
Tips for Saving for Your Investment Property in Toronto
For First-Time Home Buyers
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Start Your Savings Journey: Open a dedicated savings account to build your Toronto investment property down payment over time.
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Unlock Your RRSP Funds: Utilize the Home Buyers Plan to borrow up to $35,000 tax-free for your first home from your Registered Retirement Savings Plan (RRSP).
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Maximize Your FHSA Benefits: Contribute up to $8,000 annually to a tax-deductible First Home Savings Account (FHSA) for tax-free withdrawals.
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Secure Your Mortgage with CMHC: Qualify for a lower down payment in Toronto with a Canada Mortgage and Housing Corporation (CMHC) insured mortgage, making your entry more accessible.
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Claim Your Land Transfer Tax Rebate: Save through first-time home buyers’ land transfer tax rebates in Toronto and Ontario.
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Get Tax Credits with HBTC: Claim 15% in tax credits (up to $1,500) for home buying costs as a first-time Toronto homebuyer with the Home Buyers Tax Credit (HBTC).
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Join Forces in Joint Ventures: Partner with others to accelerate your entry into Toronto real estate and scale your investments faster.
For Seasoned Investors
Unlock Equity Through Refinancing: Restructure your mortgage to access equity from your existing home with the guidance of a financial advisor.
Diversify Your Portfolio Structure: Consider adjusting other investment holdings to enhance diversification and improve tax benefits by investing in Toronto real estate.
Optimize Joint Ventures: Continue exploring partnership opportunities to pool resources, spread out your Toronto investment property risk more effectively, and grow your real estate portfolio more quickly.
Revitalize Your Savings Plan: Start a dedicated savings plan specifically for your next Toronto investment property.
How to Qualify for a Mortgage for Your Toronto Investment Property
Check Your Credit Score: Lenders prioritize credit history when reviewing mortgage applications. Make sure your credit score is excellent by consistently paying bills on time and addressing any outstanding issues promptly. A strong credit score boosts your credibility as a Toronto real estate borrower.
Choose Toronto Investment Properties with Better Rent Yields: Opt for properties with appealing rent yields. Lenders may be more inclined to approve your mortgage if the potential rental income shows a solid return on investment. Research and select properties that align with your financial goals.
Pay Off High-Rate Debt or Restructure Existing Debt: Lower your debt-to-income ratio by paying off high-rate debts. Lenders evaluate your ability to manage multiple financial commitments. Consider restructuring existing debt to improve your financial standing and demonstrate responsible financial management.
Find Lenders Specializing in Toronto Investment Properties: Not all lenders are the same, and some specialize in investment properties. Seek out these lenders as they may have a better understanding of financing for investment purposes. Their expertise can streamline the application process and provide more tailored solutions.
Find a Partner or Guarantor: If your financial situation requires additional support, consider finding a partner or securing a guarantor. A partner can share the financial responsibility, while a guarantor provides a guarantee for the loan, increasing your chances of approval.
Look into Other Programs for Your Unique Situation: Explore specialized mortgage programs designed for specific situations, such as rental properties, high-net-worth individuals, non-residents, or small business owners. These programs may offer unique terms and conditions that better suit your circumstances.
How Do Toronto Real Estate Investors Fund Renovations?
Personal Savings: Many investors use their personal savings or establish emergency funds to cover initial renovation costs. Consider refinancing equity post-renovations to free up savings for reinvestment.
Conventional Mortgage Refinancing: Explore mortgage refinancing if you’ve built up equity in your Toronto investment property. This can unlock funds specifically for renovations, providing flexibility in your investment strategy.
CMHC Mortgage Refinancing For Secondary Suites: Homeowners can access CMHC insured mortgage refinancing to add legal secondary suites, like basement apartments or laneway homes. To qualify, you must live in the property or have a relative occupying it.
Home Equity Line of Credit: Tap into a home equity line of credit (HELOC) for flexible financing during renovations. Borrow against your home’s equity as needed, aligning seamlessly with the dynamic nature of property upgrades.
Multi-Generational Tax Credit : Take advantage of the Multi-Generational Home Renovation Tax Credit for constructing Toronto secondary suites for multi-generational living.
HST New Rental Rebate: Manage HST payments upfront and qualify for a portion of the rebate when using the property for Toronto rental property purposes, optimizing opportunities to recoup renovation expenses.
Construction Loans: Consider construction loans cautiously, especially if other financing options are unavailable. Evaluate suitability based on specific circumstances, as they may involve time delays.
Government Financing Programs: Utilize government financing programs like Toronto’s Laneway and Garden Suite Development Charges Deferral Program to defer development charges, offering financial advantages for building rental backyard homes.
Joint Venture Financing: Partner with homeowners for joint venture financing, particularly for Toronto laneway or garden suite construction. This collaborative approach shares both financial burden and eventual profits, enabling shared success in Toronto’s real estate investment market.
What Do Our Clients Say?
mia chenJune 14, 2024.We had the great pleasure of working with Nick to purchase our first house, and we were absolutely thrilled with our experience. His expertise and attention to detail were evident, and he guided us through every step of the way and answered any questions we had. He was always genial, punctual and gave prompt responses. We appreciated how he took the time to understand our specific needs and preferences. His knowledge of properties, of neighborhoods and of the market helped us find the house we wanted in just a couple weeks. Moreover, Nick has an extensive network of reliable professionals: the inspector, lawyer and contractors he suggested made us feel safe and secure in purchasing our house and turning it into our home. We are thankful to not only have an agent with exceptional professional acumen from whom we learned a lot, but also a friend who took care of us and celebrated each milestone with us. We wholeheartedly recommend Nick and the team at Elevate.umang shahJune 5, 2024.KATE's dedication and hard work during the house-hunting process were outstanding. The entire process, from our first meeting to moving day, was easy and stress-free. Her expertise, patience, and attention to detail made the experience pleasant and simple.Stephanie SheppardMay 30, 2024.I had the pleasure of working with Karina on securing a rental property, and I can't recommend her highly enough! From the very beginning, she was incredibly helpful and responsive. She answered all my questions promptly and provided clear, thorough information at every step. Karina guided me through the entire process with ease, making what could have been a stressful experience feel seamless and straightforward. Her professionalism and dedication were evident in every interaction, and she truly went above and beyond to ensure everything was taken care of. If you're looking for an agent who is knowledgeable, responsive, and genuinely cares about their clients, I highly recommend reaching out to Karina!Neil PalancaMay 23, 2024.Kate was our leasing agent, and we couldn't have asked for a better experience. From the start, she was incredibly patient and understanding, taking the time to thoroughly explain every step of the rental process. Kate clarified all the details we needed to know and was always available to answer our questions. Her professionalism and friendly demeanor made the entire experience smooth and stress-free. We felt well-informed and supported throughout. Highly recommend Kate for anyone looking to rent a place! Thank you, Kate! 5 stars for you ⭐️⭐️⭐️⭐️⭐️Joy WangMay 15, 2024.We have been with Elevate for almost 5 years, their property management team keeps delivering outstanding service. Especially Laryssa Maneja, she use to be a property manager and then become the head of property management team, now a . She gained lots of knowledge and experience regarding property investment, leasing, tenants profile, renovation over the past a few years. She is knowledgeable, organized and good at communications. Love working with her!Pradip & Raksha BhattMay 8, 2024.A big thankyou to Spiro Vrysellas at Elevate for his excellent & efficient service. Highly recommended and he is with you every step of the way. Made the process seamless.Sophie GuilbaultApril 29, 2024.We had a wonderful experience working with Laryssa for the leasing and property management of our home. She has demonstrated great knowledge of the market, creative problem solving and high responsiveness through our entire experience working with her and we couldn’t be more grateful. There are few people I would not hesitate recommending to friends and family when it comes to real estate matters but Laryssa is one of them. I trust that anyone working with her will have a similar positive experience!
