A big criteria for some real estate investors for Toronto real estate investing is location, location location – we completely agree!
But did you know that location requirements for your own end user home can be very different from choosing a location for an investment property? This is what we’re going to be talking about today!
Toronto Real Estate Locations With The Best Rents
When we’re hunting for a place to live, we typically aim for the best neighbourhood within our budget—close to good schools, friendly communities, family, great dining, and entertainment.
However, this preference for premium living often comes at a higher cost. The thing here is that these sought-after neighbourhoods, while perfect for end users, might not be the ideal choice for rental investments.
The reason? The elevated purchase prices don’t align with significantly higher rents.
This Zoocasa chart effectively showcases this. It highlights the variation in the rent-to-mortgage difference across different neighbourhoods.
Better to rent actually means less attractive rent yields. So another way to use this chart for a real estate investor in Toronto is to look for the places with biggest benefits from buying. This will mean you end up getting better bang for your buck when it comes to rental income.
Toronto Real Estate Locations With The Best Appreciation
Another thing to understand is appreciation. In a mature area that’s very desirable, the premium is already priced in. Even though you will see more stable growth year over year, you might end up seeing better appreciation in neighbourhoods that are in an upward trajectory.
You can see from the Zoocasa chart below that shows neighbourhoods in Toronto that have the highest and lowest price growth in the past 5 years (2018 – 2023).
It’s not the nicest now but it is definitely changing quickly. What happens here is that you might end up seeing much faster price growth during this growth spurt period.
Rankings By Area
As Toronto real estate investors, our main goal isn’t just picking a nice place to live. It’s about making smart investing moves to maximize your investment returns when it comes to choosing the best “location, location, location” in Toronto.
To do this, we focus on two important things:
- High Rent Yields: We want properties where where we can get great rents compared to the amount we paid for.
- Growth Potential: Assuming you’re buying and holding for the next 5-10 years, we’ll want to look for areas that have the best potential to growth during that time.
How We Can Help
If you need help finding the best Toronto real estate investing opportunities, our expert investing team can help.
We’re not your typical real estate sales brokerage. Instead, we focus on using numbers to make better real estate investing decisions in Toronto.
That can mean looking for stronger investments with positive cash flow, thinking about risk management, and looking for ways to boost returns like value-add renovations and gentrifying areas.
If you want to discuss your private real estate situation with us, just go to this link below to set up a time to chat.