Are you thinking about becoming a Toronto real estate investor? There are real benefits to investing in an asset that seems to appreciate with each passing year but there are risks as well. The wrong guidance or an ill-informed strategy can lead you to invest in properties where you collect less money than what you pay out annually.

Here is an honest look into whether you should buy an investment property in Toronto.

The Value Of Toronto: Real Estate Investment Paradise

Toronto is one of Canada’s most desirable cities for not only real estate investing but for living. Economic diversity, population growth, and a consistently strong rental market make Toronto essential to most Canadian real estate investors’ portfolios. Key areas, such as Etobicoke, are seeing urban expansion and infrastructure development driving value. These areas, and others, benefit immensely from what’s been consistent long-term appreciation and a resilient housing sector that never fails to bounce back after a setback.

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How Much Money You Need To Be A Toronto Real Estate Investor

For investment properties in Toronto, it’s best to have at least a 20% down payment. For a condo, this could mean $120,000-$150,000 upfront while a detached house will likely require $150,000-$250,000 to start. It’s also worth it to keep in mind to set aside additional funds for potential repairs and renovations that need to be completed sooner rather than later.

Who Should Invest In Toronto: Demographics And Strategy

Real estate investors should have a long-term strategy. An investor should have access to significant capital. It’s best to seek long-term appreciation over quick cash flow when you invest in Toronto, taking into account that some areas may experience temporary stalling. What you buy in Toronto should be in line with whose driving rental demand: professionals, families, and students. Find investment properties that cater to multiple tenant demographics and are well-located.

Why Long-Term Appreciation Is Better Than Cash Flow

Immediate cash flow may not be achievable in the way you want it to be with a Toronto home. Long-term appreciation allows you to navigate the market with a lot less risk. Low cap rates mean rental income may barely cover your monthly expenses initially. That said, over time, you accumulate equity. Market dynamics suggest taking a long-term approach to buying Toronto real estate.

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Is Now The Time To Buy An Investment Property In Toronto?

Post-interest rate hikes, there are opportunities to buy real estate. Many sellers are open to negotiation, though prices have plateaued in some areas. With the real estate market expected to stabilize, there’s no reason not to buy right now. The best properties to buy as an investor are single-family homes for long-term appreciation and condos in key neighbourhoods where rental demand will ensure you reap profits.

Investing In The City Of Toronto Vs. Investing In Outer Areas

The benefits of downtown Toronto real estate are that you can charge higher rents and the demand is consistent. Despite this, most real estate investors will buy in Etobicoke and outer areas rather than deep in Toronto. This is because the purchase prices are more affordable, there’s often stronger cash flow here, and transit expansion has made these areas extremely attractive.

Are you looking to buy a house as in income property in Etobicoke to add to your Toronto investment portfolio? Reach out to the experts at Adrian + Andrea at info@adrianandrea.com or call (416) 319-6893 for more information.