This is for educational purposes only; it does not guarantee future performance or serve as financial or tax advice.
Think Those Double-Digit Real Estate Returns Are Too Good to Be True?
A lot of investors hear about double-digit returns in real estate and immediately assume it’s hype. And honestly, that reaction makes sense. When you look at properties purely based on rent and appreciation, real estate on its own doesn’t beat the stock market by much — especially in today’s environment where prices aren’t rising 8% a year like they used to.
The truth is, most Toronto condos and single-family homes don’t cash flow anymore. Once you factor in carrying costs, condo fees, and taxes, many investors are earning less than they would from the stock market — and with way more effort. So why do seasoned investors still choose real estate? It all comes down to one thing: leverage.
What Makes Leverage So Powerful
Leverage simply means using borrowed money to make your own capital work harder. It’s not about taking reckless risks — it’s about using other people’s money strategically to control more assets and multiply your returns.
A lot of people were raised to think debt is bad — that you should pay off your mortgage fast and avoid loans. That mindset makes sense when debt costs you money every month. But when your borrowed money helps you make money — that’s smart leverage.
Here’s an example. Say you’ve saved $200,000. You could invest it in the stock market and earn a 10% return — that’s $20,000 a year. Or you could use that same $200K as a 20% down payment on a $1 million Toronto property. Now you control a $1 million asset while the bank funds the rest.
You collect $6,000 in rent, spend $1,000 on expenses, and pay $2,600 in mortgage interest — leaving you with about $1,000 a month in positive cash flow. That’s $28,000 a year. Add another 3% appreciation, and you’re looking at roughly $60,000 in total annual returns on your $200K investment. That’s close to 30% — three times what you’d get from stocks.
When Leverage Works Against You
Leverage isn’t magic — it amplifies results in both directions. If your property is losing money each month, debt makes the losses worse. That’s why understanding the numbers is everything.
A property only becomes a smart investment when it pays for itself. If the rent covers the mortgage, taxes, insurance, and maintenance, then the property is self-sustaining. Your tenants are paying down your mortgage while you build equity and enjoy appreciation on a much larger asset. But if you’re topping up the mortgage every month, leverage starts working against you fast.
That’s where strategic investing makes all the difference — choosing the right property type in the right market. And in Toronto, that means multiplexes.
Why Toronto Multiplexes Make the Math Work
Not every type of property in Toronto makes sense right now. Condos are often negative cash flow. Single-family homes? Same story. But multiplexes — properties with multiple rental units — still work because the math does.
With multiple income streams, higher rent-to-price ratios, and more flexibility to add value through renovations or additional units, multiplexes deliver the kind of numbers that make leverage work for you, not against you. They also align with where policy and demand are heading. Every level of government is pushing for more multi-unit housing — which means you’re investing in the direction of long-term growth and support.
Smart investors focus on opportunities where the income is strong, the upside is clear, and the risk is manageable. That’s what multiplex investing in Toronto offers — real math that adds up.
Need Help Finding the Right Toronto Multiplex Investment?
Leverage isn’t risky when used strategically. It’s what turns good real estate into a powerful wealth-building tool. The key is buying right — choosing properties that cash flow from day one so the rent covers your costs while the property grows in value.
At Elevate Realty, we don’t just talk about investing — we do it. We own, manage, and scale our own portfolios right here in Toronto, so every strategy we share comes from real-world experience.
If you want to grow efficiently and maximize your after-tax returns, you need a team that knows how to put these strategies into action. We help Toronto investors buy smarter, scale faster, and build portfolios that last. Our team can help you:
- Find high-potential properties
- Crunch the numbers so you know exactly where you stand
- Coach you through renovations to maximize returns
- Lock in great tenants
- Provide full property management so your investment runs smoothly
Want to see what’s possible for you? Book a strategy session with us here.
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!
