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 Buying for Your First Property in Toronto
For First-Time Home Buyers
Start Your Savings Journey: Open a dedicated savings account to build your Toronto investment property down payment over time.
Unlock Your RRSP Funds: Utilize the Home Buyers Plan to borrow money tax-free for your first home from your Registered Retirement Savings Plan.
Maximize Your FHSA Benefits: Contribute annually to a tax-deductible First Home Savings Account for tax-free withdrawals towards your first home.
Secure Your Mortgage with CMHC: Qualify for a lower down payment in Toronto with a CMHC insured mortgage, making your entry more accessible.
Claim Your Land Transfer Tax Rebate: Save through first-time home buyers’ land transfer tax rebates in Toronto and Ontario.
Get Tax Credits with HBTC: Claim tax credits for home buying costs as a first-time Toronto homebuyer with the Home Buyers Tax Credit.
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?
V MOctober 18, 2024.Special thanks to Karina! My wife and I were able to get an apartment in our desired location. It was challenging to find someone we could trust, especially since it was done from outside our province. Karina made the process easy and fast. Thank you and highly recommend to everyone.natalie escobedoSeptember 11, 2024.Laryssa is definitely the best, always attentive helping with any problem, she is very empathetic and very kind, I highly recommend her, without a doubt you will have the best service with her.Giulia VentrellaAugust 28, 2024.As first-time investment property buyers, my husband and I were fortunate to meet and work with Spiro Vrysellas. From the very beginning, Spiro was not only professional but also incredibly patient, taking the time to explain every step of the process in detail. He understood our needs and goals, and his extensive knowledge of the market was evident in every recommendation he made. His expertise and dedication made what could have been a stressful experience feel smooth and manageable. Thanks to Spiro, we found the perfect property that met all of our criteria and exceeded our expectations. We highly recommend him to anyone looking to buy or invest in real estate!Eleftheria Kalenteridou-KritouAugust 21, 2024.Nick is an amazing realtor! His knowledge and passion to help was what got us the property we really wanted. 5 stars are not enough to describe his dedication to his work. Thank you!
