Toronto Real Estate for Investors

Investors

Investing in Toronto Real Estate

Toronto real estate can still be a good long-term investment, but in 2026 it only works when the numbers work on paper first. The Storey Team helps investors buy, hold and sell Toronto condos and small multiplexes using real rent, cash flow and resale data rather than hope.

We have been part of more than 1,000 transactions and we rank in the top 0.1% of Toronto real estate. We also talk about the investor side of this market every week on The Tom Storey Show, and we are blunt about it. Some properties pencil out. Many do not. Our job is to tell you which is which before you buy, and to have an exit plan before you need one.

On this page

The CASH Method

The CASH Method is the four step framework The Storey Team uses to evaluate a Toronto investment property: Cash flow, Appreciation path, Suite and tenant rules, Hold and exit plan.

C. Cash flow

We start with what the property will actually earn and cost every month: realistic rent from recent leases in the same building or street, mortgage payments at today’s rates, condo fees, property tax, insurance, maintenance and vacancy. If the property needs your paycheque to carry it, you need to know that up front and decide if the trade-off is worth it.

A. Appreciation path

Cash flow pays the bills. Appreciation builds wealth. We look at what will drive value over your hold period: transit, new supply nearby, the building’s resale history, unit size and layout, and who the next buyer will be.

S. Suite and tenant rules

Rent control, the age of the unit, zoning for additional suites, short-term rental restrictions, condo rules and the Residential Tenancies Act all shape what the property can earn and how flexible you will be later. We check them before you buy, not after.

H. Hold and exit plan

Every investment property needs a plan for how and when it gets sold. Tenanted or vacant, end user or investor buyer, taxable gain or not. Knowing the exit changes which property you should buy in the first place.

Why investing in Toronto is different now

For most of the last two decades, Toronto investors could buy almost anything and let appreciation cover thin or negative cash flow. That stopped working when rates rose and a record wave of investor-owned condos completed at once. Today the investors who do well are the ones who buy below replacement cost, choose layouts that end users want, understand the landlord rules, and hold with enough cushion to wait out a soft market.

Is Toronto still a good investment?

Is Toronto real estate a good investment in 2026?

It can be, for the right buyer with the right property and a long enough horizon. Prices have corrected, particularly in condos: TRREB reported the average City of Toronto condo apartment price at $649,330 in the first quarter of 2026, down from $711,258 a year earlier. Lower prices plus stable rents mean the numbers are better than they were at the peak. They are still tight, so the property selection and financing matter more than ever.

Are investors selling Toronto condos?

Many have been. A large share of the condos completed in 2024 through 2026 were bought pre-construction by investors whose original math assumed lower rates and higher rents. Some have sold rather than carry negative cash flow, which has added to resale supply. For buyers with patience and capital, that pressure has created opportunities that did not exist a few years ago.

Should I invest in a Toronto condo or a house?

A condo has a lower entry price, less maintenance and easier management, but fees reduce cash flow and condo values have been more volatile. A house, especially one that can legally hold more than one unit, costs more and needs more management, but you own land, you control the building, and multiplex income can carry more of the cost. Many investors start with a condo and move to small multiplexes as their equity grows.

What is the best type of condo to buy as an investment in Toronto?

In our experience, units that end users also want to live in. That usually means one bedroom plus den or two bedroom layouts with usable space, in well run buildings close to transit, employment and universities. Very small studios have been the weakest performers because they appeal almost only to investors, which is the pool that has shrunk the most.

Does a new transit line increase property values?

Historically, proximity to rapid transit has supported both rents and resale values in Toronto. Line 5 Eglinton began service on February 8, 2026, and the Ontario Line is under construction. The premium tends to be priced in long before a line opens, though, so buying near a station is only an advantage if you are not overpaying for it.

Cash flow, rent and financing

Do Toronto condos cash flow?

Some do, many do not, especially with 20% down at today’s rates. Whether a unit cash flows depends mostly on the purchase price, the down payment, the mortgage rate, the condo fee and the achievable rent. Run the numbers on our Cash Flow Calculator before you fall in love with a unit, and stress test them with a vacancy month and a higher rate at renewal.

How much can I rent my Toronto condo for?

The best evidence is recent leases in the same building for the same layout, which we can pull from the MLS. Asking rents on rental websites often overstate what units actually lease for. Rents in Toronto softened through 2025 and 2026 as new supply hit the market, so assume today’s leased rents, not last year’s.

How much down payment do I need for an investment property in Toronto?

For a rental property that you will not live in, lenders generally require at least 20% down because default insurance is not available on non-owner-occupied properties. If you buy a property with up to four units and live in one of them, you may qualify for a lower down payment on an insured mortgage, subject to the $1.5 million price cap.

What expenses should I include when analyzing a rental?

Mortgage principal and interest, property tax, condo fees, insurance, utilities you pay, maintenance and repairs, a vacancy allowance, leasing costs, and accounting or legal fees. For a freehold or multiplex, add a capital reserve for roofs, furnaces and major systems. The most common mistake we see is leaving out vacancy and maintenance.

What is a good cap rate for a Toronto rental property?

Toronto has historically traded at low cap rates compared with other Canadian cities, because investors have priced in long-term appreciation. For residential condos and small multiplexes, net cap rates in the low single digits are common. That is why the purchase price, financing and long-term hold matter more here than in markets where cash flow alone carries the investment.

Can I use the equity in my home to buy an investment property?

Yes. Many Toronto investors use a refinance or a home equity line of credit on their principal residence for the down payment. It can be efficient, and interest on money borrowed to earn rental income may be tax deductible, but it increases your total debt and your risk. Talk to your mortgage broker and accountant about structure before you commit.

Rent control and landlord rules

Is my Toronto rental subject to rent control?

In Ontario, units first occupied for residential purposes after November 15, 2018 are exempt from the annual rent increase guideline. Units first occupied on or before that date are covered. For covered units, the guideline is 2.1% for 2026 and 1.9% for 2027. The exemption is one of the most important factors in the value of a newer rental condo.

How often can I raise the rent in Ontario?

Once every 12 months, with at least 90 days written notice using the proper form. Even in exempt units, those notice and timing rules still apply. You can set the rent at whatever the market will bear when a new tenant moves in.

Can I get my unit back from a tenant if I want to sell?

Not simply because you want to sell. A tenancy continues after a sale. A unit can be recovered for the buyer’s own use, or for the use of certain family members or a caregiver, only in specific circumstances and with proper notice, compensation rules and good faith. The rules changed in 2026, and penalties for bad faith notices are now severe, so get legal advice before serving anything.

Can I rent my Toronto condo on Airbnb?

Generally not as an investment. The City of Toronto only allows short-term rentals of under 28 days in your own principal residence, and an entire home can only be rented for up to 180 nights a year. Investment properties cannot be used as short-term rentals, and many condo buildings ban them in their rules anyway. Rentals of 28 days or more fall under the regular landlord and tenant rules.

What is Toronto’s Vacant Home Tax?

Every residential property owner in Toronto must file an annual occupancy declaration by April 30 for the prior year. If a property is vacant for six months or more in a year and no exemption applies, the tax is 3% of its assessed value. Missing the declaration means the property is deemed vacant, so investors with properties between tenants need to file every year without fail.

Do I need a property manager for a Toronto rental?

Not necessarily for a single condo, but many investors choose one, especially if they live outside Toronto. Our team focuses on buying, selling and leasing, so we can find and place qualified tenants, but we do not offer ongoing property management. We are happy to refer you to managers we trust.

Condos, multiplexes and pre-construction

Can I add a second unit or a garden suite to a Toronto house?

Toronto now permits up to four residential units on most residential lots across the city, including secondary suites, laneway suites and garden suites where the lot qualifies. That has made many detached and semi-detached houses more interesting to investors. Zoning, building code, fire separation and servicing still have to work, so get a feasibility review before you buy on the assumption you can add units.

Is a duplex or triplex a good investment in Toronto?

Legal multiplexes can be some of the better investments in the city because you own land and spread costs across more than one rent. The key word is legal. A property with units that do not meet code or are not registered can come with insurance, liability and financing problems, so we check the history and permits as part of every multiplex purchase.

Should I buy pre-construction as an investment?

Be very careful. Pre-construction worked for years because prices rose faster than closing costs and delays. In today’s market, many investors are closing on units worth less than they agreed to pay, with occupancy fees and development charges on top. If you do buy new, Ontario’s temporary HST relief and builder incentives can change the math, but the unit still has to make sense against resale prices you can buy today.

Can I buy a Toronto investment property through a corporation?

Yes, but it changes financing, taxes and costs, and it rarely makes sense for a first property. Corporate buyers usually face stricter lending, higher rates and different tax treatment, and a corporation cannot claim the principal residence exemption. Speak to an accountant who works with real estate investors before you set it up.

Can a non-resident or foreign buyer invest in Toronto real estate?

The federal Prohibition on the Purchase of Residential Property by Non-Canadians Act restricts most non-Canadians from buying residential property in urban areas like Toronto, with exceptions, and it is scheduled to expire on January 1, 2027. Separately, Ontario charges a 25% Non-Resident Speculation Tax on residential purchases by foreign nationals. Check the current status of both with a lawyer before you plan a purchase.

Taxes for Toronto investors

Do I pay capital gains tax on a Toronto investment property?

Yes. When you sell a rental property for more than you paid, plus eligible costs, the gain is taxable. Half of a capital gain is included in your income in 2026, since the proposed increase to the inclusion rate was cancelled in March 2025. A property held for less than 365 days can be taxed as business income under the federal anti-flipping rule, with limited exceptions.

What rental expenses can I deduct?

Generally, current expenses incurred to earn rental income, such as mortgage interest, property tax, condo fees, insurance, repairs, utilities you pay and management fees. Major improvements are usually capital costs that are depreciated over time instead. Your accountant will tell you what applies and whether claiming depreciation makes sense, since it can be recaptured when you sell.

Is rental income taxed in Canada?

Yes. Net rental income is added to your other income and taxed at your marginal rate. If you have a rental loss, it can generally offset other income, which is one reason investors with negative cash flow should keep clean records and speak to an accountant.

Can I live in my investment property to avoid capital gains tax?

The principal residence exemption only covers the years a property was actually your principal residence, and you can only designate one property per family unit for any given year. Moving into a rental can change how the gain is calculated and may trigger a deemed disposition when the use changes. This is accountant territory, and it is worth planning in advance.

Selling an investment property

Should I sell my Toronto investment condo now or wait?

It depends on your cash flow, your mortgage renewal date, your tax position and what else you would do with the money. If the property carries itself comfortably and you can wait, holding through a soft market is often reasonable. If it is costing you every month and your renewal is coming up at a higher rate, selling sooner can be the better financial decision. We model both paths with real numbers.

Is it better to sell a condo vacant or with a tenant?

Vacant units usually sell for more because they appeal to end users as well as investors, and end users are the larger and stronger buyer pool in downtown Toronto. A tenanted unit with rent close to market can still sell well to an investor. A tenanted unit with rent well below market will usually sell at a discount. The decision should be modelled before listing.

How do I sell a tenanted condo in Toronto?

Give the tenant proper written notice before every showing, as required under the Residential Tenancies Act, and in practice agree on a regular showing schedule with them in writing. A cooperative tenant is worth real money. Disclose the lease terms clearly to buyers, and if a buyer intends to occupy the unit, plan for the timing and rules that apply to ending the tenancy.

Working with us as an investor

What does an investor-focused realtor do differently?

We start with the numbers, not the finishes. That means pulling leased comparables, checking rent control status and building rules, stress testing cash flow, and thinking about resale before you buy. We will also tell you when a property does not work, which is the most valuable thing an investor’s agent can do.

Do you help investors find tenants?

Yes. Our team handles leasing, including pricing, marketing, screening and preparing the lease, so your property is placed with a qualified tenant. We do not provide ongoing property management, and we can refer you to trusted managers if you want one.

Do you work with out-of-town and international investors?

Yes, within the federal and provincial rules that apply to your situation. Many of our investor clients live outside Toronto and handle everything remotely with digital signatures and video walkthroughs. We do not act as a Canadian agent for non-resident owners, and we can introduce you to specialists who do.

How do we get started?

Start with a strategy call. We will talk through your budget, financing, goals and timeline, then show you what the numbers look like on properties that fit. There is no cost and no obligation.

Call or text The Storey Team at 416-670-2432, or email tom@storeyteam.ca.

Investing across Toronto

We help investors across the City of Toronto. Downtown condos in King West, Liberty Village, CityPlace, Fort York, the Financial District, St. Lawrence, Church and Wellesley and near the University of Toronto and Toronto Metropolitan University. Midtown at Yonge and Eglinton along Line 5. Multiplex and suite potential in Leslieville, the Danforth, East York, the Junction, Little Portugal, Dufferin Grove and Etobicoke. And value pockets in North York and Scarborough.

Talk to us before you buy

The most useful conversation happens before you sign anything. We will run the real numbers with you and give you an honest answer about whether a property works. There is no cost and no obligation.

Call or text 416-670-2432 or email tom@storeyteam.ca