This is for educational purposes only; it does not guarantee future performance or serve as financial or tax advice.
Same price, totally different outcome. If you’re trying to grow real wealth through real estate, it’s not enough to buy what’s easy — you need to buy what performs.
We recently worked with a client weighing two very different types of properties in Toronto. One was a shiny downtown condo near the Distillery District. The other? A fixer-upper detached house in midtown.
Both were priced at around $800K. But once we looked past the surface and into the numbers, the house came out way ahead — on cash flow, appreciation, and value-add potential.
The Condo: Looks Good on Paper, But…
The condo was a newer 2-bedroom, 2-bath unit that sold for just under $800,000. It was move-in ready, no renos needed, and had a decent rental income of about $3,200/month. But once you included $1,200/month in condo fees and property taxes, your cash flow quickly turned negative.
After financing costs, this investor would be cash flowing negative $1,000/month — and that’s not even including repairs, vacancies, or special assessments that can hit you out of nowhere.
Condos can feel easier — no renovations, fewer maintenance headaches — but at what cost? In this case, that “easy” came with negative cash flow and very little ability to improve the numbers over time.
The House: More Work, More Reward
Now let’s look at the detached house. Same purchase price — about $800K — but this one needed renovations.
We budgeted $150K to legally convert it into a triplex, which brought the total upfront cost (with down payment) to around $340K. That might sound like a lot, but here’s what that investment unlocked: three separate units — a 2-bed upper, a 1-bed main, and a 1-bed basement — pulling in over $6,000/month in rent.
Operating expenses are similar to the condo — around $1,200/month for taxes, insurance, and maintenance. But instead of losing money each month, this property cash flows over $2,000/month. That’s a $3,000 swing in cash flow for the same purchase price.
Exit Strategy: Lift, Refi, and Grow
Once the renovations are done, the triplex is expected to appraise for around $1.1M. That’s $150K in equity lift right there. After refinancing, the investor should be able to pull out around $240K, leaving only $100K of their own money in the deal — all while keeping a property that cash flows positive still.
And we’re not done yet. The property also has backyard development potential. With Toronto’s new multiplex and garden suite policies, there’s a real shot at adding even more value down the line.
But What About Appreciation?
Condos had their moment — especially from 2010 to 2020, when low interest rates and pre-construction hype pushed prices up. But since rates started rising in 2022, condos have struggled. On the other hand, freeholds — especially houses with rental potential — are holding strong. Why? Less new supply, more end-user demand, and way more ways to add value.
How We Can Help
If your goal is to build long-term wealth, cash flow matters. Value-add potential matters. And yes, appreciation matters too. In this head-to-head comparison, the detached house beat the condo on all three fronts — even though the purchase price was the same.
If you’re ready to learn more about how we find and structure high-performing multiplex deals in Toronto, reach out. We’ll show you how to make your money work harder — and smarter.
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?
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