This is for educational purposes only; it does not guarantee future performance or serve as financial or tax advice.
A lot of new real estate investors think they’re making smart, numbers-based decisions — but they’re still getting it wrong. Not because they’re lazy. Not because they’re not trying. It’s because they’re using the wrong filters to figure out what makes a good investment.
Here’s the hard truth: what feels safe or familiar isn’t always what builds real wealth.
Let’s break down the three most common mistakes new investors make — and how to avoid them.
Mistake #1: Thinking New Builds Are Always Better
New builds look shiny and low-maintenance at first. But when it comes to investing? They’re usually not the smart move.
Here’s why:
Higher price tag: New homes cost more, but their value drops faster. New builds are priced based on the building, not the land. And buildings depreciate. Land holds its value.
Weak rental yields: Just because you paid a premium doesn’t mean you’ll collect much more rent. In fact, it’s usually pretty disappointing.
Multiplexes too: New multiplexes sell for 30%+ more than older ones — but they don’t earn enough extra rent to justify the cost.
Smarter play: Buy an older property, fix it up properly, and control the value yourself. Renovations give you forced appreciation — meaning you can lift the value and your rent after improvements. Plus, you’ll know the guts of your property are solid.
Mistake #2: Buying Where You’d Want to Live
Sure, nice neighbourhoods feel safe. But safe feelings don’t pay your bills.
The numbers don’t lie:
Higher prices: You’ll pay up to 50% more for a home in a “nice” neighbourhood.
Squeezed rents: Rents only go up about 10–20% in those same areas. That kills your cash flow.
Weaker resale: Investors get priced out, and since gentrification already happened, property value growth slows way down.
Bottom line: You’re paying more without getting better returns. Don’t buy with your heart — buy with your calculator.
Mistake #3: Buying Based on Where Your Kids Might Live Someday
This one’s emotional — but it’s still a mistake.
You buy near a university or in a “nice” neighbourhood just in case your kids want to live there. Guess what?
There’s zero guarantee they’ll live there, study there, or even stay in the city at all.
So what happens? You tie up your money in an average investment based on a maybe — when you could’ve used that same money to build serious wealth instead.
Smarter move: Invest for strong returns now. Build your portfolio. Grow your wealth. Then later, you can help your kids wherever they actually end up.
How to Actually Make Smart Real Estate Investments
Here’s the winning formula:
Cash flow: Positive cash flow makes your investment safer and stronger.
Value-add potential: Look for properties you can improve to force appreciation.
Long-term growth: Pick areas with strong tenant demand and future upside.
That’s why we focus on Toronto multiplexes instead of new condos or townhomes. More doors under one roof = more rent, better cash flow, and less risk. We also handpick neighbourhoods where tenant demand is strong and long-term value growth is still ahead of us.
When it comes to older properties, many of our clients choose the renovation route because the numbers just make sense. Renovate upfront, avoid nasty surprises later, and enjoy peace of mind knowing your property’s in great shape.
We talk about numbers a lot — because that’s what builds wealth. If you want to see what this actually looks like, check out the video where Phil and I walk you through a real Toronto multiplex deal.
Want Help Finding the Right Multiplex In Toronto?
That’s exactly what we do at Elevate Realty. Here’s what it’s like to start as a client with us:
- Initial Consultation: We’ll talk with you to understand your needs and teach you how to invest wisely in Toronto real estate.
- Market Search & Purchase: We’ll search the market to find the perfect property for you.
- Renovation Support: If the property needs renovations, our trusted contractors are ready to help, and we’ll coach you as you manage the project.
- Leasing and Management: If you need help renting out and managing your property, our leasing and management team is here for you.
Ready to get started? Click on the link below, and let’s start working together!
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!
