It’s one of the most common questions we hear: Is now a good time to buy an investment property in the GTA? After several years of rapid price growth, followed by a cooling market, the answer has changed. It depends on your goals, your timeline and, most of all, the numbers.
Here’s our honest take on whether it’s a good idea to invest in the current market.
Discover more advice on how to become a landlord in Ontario.
Rents vs. Prices: Do the Numbers Work?
To give you an idea of return potential and costs in today’s market, let’s break down some recent numbers. These figures are illustrative only. Your actual mortgage, tax rate, and rent will vary.
TRREB’s Q2 rental report puts the average one-bedroom condo rent at $2,273, down 2.3% year-over-year. The average two-bedroom rent is $3,013, down 1.7%. Tenants currently have plenty of choice. However, the number of leases signed grew faster than the number of units listed for rent, which suggests the rental market may slowly tighten.
Here’s a simplified example using the August average condo apartment price of $617,593:
- Down payment (20%): about $123,500
- Mortgage payment (about $494,000 at 4.6%, 25-year amortization): about $2,775 per month
- Maintenance fees, property tax and insurance: roughly $1,000 per month
- Total carrying cost: about $3,775 per month
- Rent at the two-bedroom average: $3,013 per month
That leaves a monthly shortfall of roughly $750 before vacancy and repairs. But that’s not the whole story.
About $880 of that first mortgage payment goes toward principal, which means your tenant is helping you build equity every month. Investing in GTA real estate is usually a total-return strategy that combines mortgage paydown and long-term appreciation. It is rarely a cash-flow strategy from day one unless you put more money down or find a property with more than one income stream.
Interested in buying an investment property in Toronto? Read these blogs for more advice!
- Is a House a Good Investment?
- What Do You Need to Buy a House in Ontario
- Hidden Costs of Buying a House
Comparing Your Options: Condo, Single-Family or Multiplex
Condos
Pros: The lowest entry price, minimal maintenance, and strong tenant demand near transit and employment hubs. Units first occupied after November 15, 2018, are also exempt from Ontario’s annual rent increase guideline.
Cons: Maintenance fees eat into cash flow, and special assessments can appear without warning. Many new buildings also have a lot of investor-owned units competing for the same tenants. Condo values have lagged other property types in recent years.
Single-Family Homes (Detached, Semi and Townhouse)
Pros: In August, GTA averages were $1,288,669 for detached homes, $931,665 for semis and $882,060 for townhouses. These homes come with land, which has historically appreciated better than condo units. Family tenants also tend to stay longer, and you’re in full control of the property.
Cons: The capital required is much higher. On an average detached home with 20% down, the mortgage alone would be close to $5,800 a month, which is well above what most single-family homes rent for. You’re also responsible for every repair, from the roof to the furnace.
Multiplexes and Homes with Secondary Suites
Pros: Toronto now permits up to four units on most residential lots as-of-right. As a result, duplexes, triplexes, fourplexes, and houses with legal basement or garden suites are increasingly attractive. Multiple rents reduce your vacancy risk and offer the best chance of positive cash flow. Adding a unit can also create value through renovation.
Cons: These properties have higher purchase prices, and conversions mean permit and construction costs and timelines. You’ll also have more tenants to manage. Older multiplexes often have long-term tenants under rent control. Zoning, building code and fire code compliance are essential, so make sure every unit is legal.
The Pros and Cons of Real Estate Investing
The advantages:
- Leverage: A 20% down payment controls 100% of the asset’s appreciation.
- Forced savings: Tenants help pay down your mortgage.
- Inflation protection: Over the long term, rents and property values tend to rise with inflation.
- Tax benefits: Mortgage interest and operating expenses are generally deductible against rental income.
- A tangible asset: You can improve the property and directly influence its value.
The drawbacks:
- Illiquidity: You can’t sell a property in a day the way you can sell a stock.
- High transaction costs: These include land transfer tax (doubled within Toronto), legal fees and commissions.
- Landlord responsibilities: These include repairs, tenant turnover, and Landlord and Tenant Board timelines that can stretch for months if issues arise.
- Concentration risk: Much of your net worth ends up tied to a single asset in a single market.
- Renewal risk: Your carrying costs could rise if rates are higher when your mortgage renews.
Explore more catch-all real estate resources on my blog. Here are a few posts to get started:
- Do I Need a Realtor to Buy a Home?
- When is the Best Time to Buy a House?
- What to Know About Real Estate Negotiation
So, Should You Buy Right Now?
The case for buying: Prices are below last year’s levels, there’s more inventory to choose from, and you can negotiate on price and conditions. Falling new listings and rising rental activity suggest this window may not stay open forever. Investors who buy in quieter markets have often done well when activity returns.
The case for waiting: Most condos and single-family homes won’t produce positive cash flow at today’s prices with 20% down. Rents have been softening, and economic uncertainty, including trade tensions with the United States, remains a wildcard.
A GTA investment property tends to make the most sense if you:
- Have a horizon of 7 to 10 years or more.
- Have stable income that can comfortably cover a monthly shortfall.
- Keep reserves for vacancies and repairs.
- Focus on properties with more than one income stream or with value-add potential.
Before you buy, stress-test your numbers at a higher interest rate and budget for at least one month of vacancy per year.
The Bottom Line
This isn’t a market where almost anything you buy goes up quickly. It’s a market where the right property, bought at the right price with realistic expectations, can still build significant long-term wealth. The difference is in the details.
If you’re weighing a GTA investment purchase, the Ambler Real Estate Team can help you run the numbers on specific properties, compare neighbourhoods and rental demand, and find opportunities that fit your goals. Reach out to us today to start the conversation.
Ready to explore Toronto’s investment market? Call (416-884-8027) or email (team@amblerhomes.com) to reach our team!
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