Know The Differences
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Sample Returns
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Toronto Real Estate Prices
When thinking about property investments, condos might catch your eye with a seemingly lower upfront cost, but their higher price per square foot often translates to lower returns.
While condos can be a decent long-term investment with appreciation, if you have the budget for a higher purchase price, consider exploring a house conversion project or an existing multi-family home for potentially better returns.
Low-rise prices vary based on factors like condition, finishes, size, and the number of units. Some low-rise projects boast a lower initial purchase price, but they may demand more upfront capital due to extensive renovations. The silver lining is that these renovations can lead to better value-add returns, and you can free up your capital through refinancing after the improvements.
Condo
$XXX,XXX+
Single Family HOme
$XXX,XXX+
Multi-Family Home
$X,XXX,XXX+
Capital Required
The amount of capital you’ll need depends on your down payment and required renovations. Additionally, budgeting around 5% for closing costs and miscellaneous expenses is a good rule of thumb.
Residential Mortgage (5 units or less)
Typically XX% Downpayment
Conventional Commercial Mortgage (5 Units or more)
Typically XX-XX% Downpayment
Insured Commercial Mortgage (5 Units or more)
Minimum XX% Downpayment With Many Restrictions
When taking on a project, factor in renovation costs, which can range widely. The key here is having the capital upfront. However, once you’ve completed the renovations, many investors refinance the property at its higher market value post-renovations. This strategic move allows you to free up capital after the project is successfully done.
Kitchen or Bathroom Remodel
$XX,XXX+
Adding A New Unit To Existing Footprint
$XX,XXX+
Adding A 1,000 sf Backyard House
$XXX,XXX+
Active Management
Being a landlord involves various responsibilities, from renting out your property to ensuring its upkeep. Regular maintenance and addressing issues are key, and the workload depends on factors like age, condition, size, and type of property.
416 Condo
XXX XXX
Single Family Home
XXX XXX
Multi-Family Home
XXX XXX
Returns Part 1: Rental Income
A reliable part of real estate returns come from rental income. To achieve this, the rent you collect should:
- operating costs and mortgage interest
- help you build up equity by paying down your mortgage
- may even leave you with extra positive cash flow
Condo
XXX Rent Yields
XXX Rental Income
XXX Cash Flow
Single Family Home
XXX Rent Yields
XXX Rental Income
XXX Cash Flow
Multi-Family Home
XXX Rent Yields
XXX Rental Income
XXX Cash Flow
Returns Part 2: Appreciation
Besides the money you get from renting out your place, you also make some money in the long run passively as your property’s value goes up over time.
Not every part of Canada sees appreciation at the same speed. You can expect similar rent yields and a good chance of stable long-term appreciation in XXXXXX.
Returns Part 3: Value-Add Gain
You can also earn money through real estate investing by actively boosting the property’s value. This happens when you renovate or make improvements, leading to an increase in its overall worth.
416 Condo
XXX XXX
Single Family Home
XXX XXX
Multi-Family Home
XXX XXX
Interested in diving deeper into Toronto real estate investing?
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