Is Investing in Toronto Real Estate Right for You?

There’s no doubt that Toronto real estate attracts its fair share of investors, and for good reason. Properties in the city offer impressive returns—both when it comes to steady monthly income, and appreciated sale prices. While investors are aware of this potential, many are hesitant to dive into the market for the first time.

The truth is, there’s never been a better time to invest in Toronto real estate. Having said that, it’s always wise to make an informed decision. If you’re thinking about property investing in the city, here’s how to tell if it’s right for you…

Why Real Estate?

Property has long been viewed as the ideal low-risk investment. Typically, buyers put down 20 percent for an asset that will appreciate both in terms of monthly income (the rent they charge) and capital gains (their profit when they sell). Real estate also acts as an inflation hedge. In other words, even when the purchasing power of the dollar goes down, the value of your property is likely to go up.

If you’re thinking of borrowing to invest, the cost of doing so to purchase real estate is relatively low. The debt you’ll take on is also considered safer than that which comes with most investment products, which can help take some of the risk out of the equation.

Why Toronto?

When it comes to real estate investing, Toronto’s market is full of potential. With a vacancy rate sitting below 1 percent, the demand for rentals is high—and so is the income you can bring in each month. This city commands the steepest rents in the country, and they’re on the rise!

Looking forward, the need for rentals will only increase in the years ahead. Toronto is growing faster than any other city in North America, and the population is expected to balloon by over 35 percent by 2046. Many newcomers to the city work in tech and other professional sectors, which also means an influx in potential qualified tenants for investment properties.

Are You Ready?

Purchasing Toronto real estate may be a great way to diversify your portfolio, but it’s not necessarily right for first-time investors. That said, if you’re on solid footing—which means you’ve paid off your student loans and are in a good financial position—property may just be the right investment for you.

Of course, being prepared is about more than just your finances. It’s also about doing your homework. Start by looking into different property types. Condos tend to be less hands-on than single-family homes and townhouses, since management is partially covered by monthly maintenance fees. For this reason, units are often a good bet for first-time real estate investors.

You might also want to consider off-market properties. Many first-timers are unaware of the benefits of looking at real estate that isn’t listed on the multiple listing service (MLS). If you work with an agent who knows this “hidden market,” they can help you find exclusive opportunities that many investors don’t know how to locate.

No matter what type of property you choose, make sure you know your responsibilities as a landlord—and how to screen potential tenants. From credit checks to references, leave no stone unturned. It’s your investment, and one of the best ways to safeguard it is by renting to a reliable tenant.

Toronto’s real estate market can be challenging to navigate at first—but it’s also full of opportunities. If you’re serious about tapping into them, there’s no better time than now. Start your property-investment journey off right. Work with an agent who understands the market, local real estate, and the financial side of every transaction—inside and out.

Ready to tap into Toronto’s lucrative real estate market? Get in touch to start a conversation about how we can build on your personal wealth today.

Adrian Mainella

Adrian is an innovator, a problem solver, and a trusted expert in Toronto real estate.

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