Before we show you great investment properties in Toronto, let’s talk about how you make money with real estate, so you know what to look out for.
How Do You Make Money On An Investment Property?
There are four ways to make money with an investment property:
- Principal Paydown: Gradually Owning More of Your Property
- Long-Term Appreciation: A Growing Asset Over Time
- Value-Add Gain: Boosting Your Property’s Worth Through Smart Renovations
- Cash Flows: Extra Cash in Your Pocket Each Month
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Principal Paydown
A part of every mortgage payment goes towards paying down your loan principal (so you owe less to the bank and own more of the investment property).
It’s like part of your rental income from your investment property goes into a forced savings plan that adds up over time, and this part boosts your total investment property returns.
Long-Term Appreciation
Over time, real estate tends to appreciate, despite short-term ups and downs.
In Toronto, entering the investment property market can be pricier, typically requiring a minimum of $250,000 of investment capital for a house (for a 20% downpayment and closing costs).
But if real estate investors can afford this, many are drawn to Toronto due to its strong and stable appreciation, averaging around 7% per year over the past two decades.
This consistent growth makes Toronto’s real estate means better returns and lower risk when you want to cash out and take profit.
While good rental income is always important, experienced real estate investors often prioritize better appreciation potential.
Why? When selling, only half of the capital gains are taxed, offering a better tax structure.And when you don’t want to sell your investment property, you can access the gains through mortgage refinancing without facing substantial transaction fees or paying taxes.
Value-Add Gain
Adding value to your investment property through renovations is called value-add gain, and it can be quite rewarding.
But here’s the thing – it’s not for everyone. It takes time, effort, and renovation risk.
The amount of value-add gain you get depends on the renovations you choose (aim for maximum return), the people you hire, and how well the project is managed (which gets better with experience).
Cash Flows
Cash flow is the extra money you might get each month you get after paying all the property bills and the mortgage.
We like to be smart about it, aiming for at least breaking even (net zero cash flows), so we don’t have to worry about covering monthly property payments (negative cash flows). The more money you make from your investment property, the better your cash flows can be, which can mean better overall real estate investment returns too.
This is the main deal for some real estate investors –those looking for financial freedom and a break from the 9-5 grind often work towards getting big cash flows from their rental properties.
Their goal? To have these real estate investments bring in enough income to eventually replace their day job pay.
a Sneak Peek at A Toronto Investment Property We're Eyeing
Actual returns may vary depending on assumptions. Read our definitions and assumptions.
Get In Touch With The Toronto Real Estate Investing Pros!
Learning about investment properties is a good start, but the real magic happens when you actually take action.
We’re here to walk you through how we find the best Toronto investment property deals, compare different real estate investment options, and show you what kinds of renovations can add the most value.
If you’re wondering how we pick the best investment property opportunities in Toronto, just reach out.
What Toronto Real Estate Investment Is Right For You?
Check out our complete Toronto real estate investment guide for all the details and real-life examples. If you’re ready to dive in, just book a call with us!
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What Do Our Clients Say?
Xavier Grunauer
December 2, 2023.
Kate helped us find new tenants for our house. She listened to our hopes and concerns & then she delivered new tenants as requested.
Reid Millar
November 19, 2023.
Great experience! Very good communication and timely follow through!
Amy C
November 17, 2023.
I recently had the pleasure of working with Spiro who helped guide me through both the purchase and leasing processes. He seamlessly transition from helping me find the perfect property to facilitating the leasing arrangements was truly commendable. During the purchase phase, he demonstrated his understanding of the market to identify properties that aligned with my preferences and budget. His negotiation and relationship skills ensured a fair deal and the buying process was efficient.
Valentin Alen
November 16, 2023.
We are incredibly grateful for Kate's exceptional support at Elevate Realty. As newcomers in Toronto, we were initially anxious about the real estate process, but she made it all work out seamlessly. She was a pleasure to work with. Kate took the time to fully understand our needs and what we were looking for and did an amazing and very proactive job at finding the perfect property. Communication was great - she was very responsive and transparent. Would definitely recommend working with her.
Michael Iannuzziello
November 11, 2023.
It was a pleasure to work with Nick and Spiro!! They were extremely helpful throughout the whole process and were always available to answer our questions. They were committed to maximizing the value of our property and always put our needs first. They are both extremely knowledgeable and professional and we highly recommend Nick and Spiro to anyone looking to buy, sell or invest.
Joachim Tan
November 10, 2023.
We had purchased a rental property through Elevate which we were happy with, and decided to also use their tenant placement service. Kate was fantastic to work with as she was very experienced and pleasant. We would use them again in the future without hesitation.
TED J
November 6, 2023.
Billy/Elevate Realty guided every single step of me purchasing my first house.It was wonderful doing business with him.
Jack Carver
October 27, 2023.
I worked with Laryssa as I was interested in a unit she was representing and found her to be compassionate, helpful, and informative about the process. I ultimately didn’t go with the unit but through the process I felt valued as a prospective tenant and appreciated her efforts to improve my application. Highly recommended!
Eileen Li
October 27, 2023.
We bought our first investment property with Spiro. Spiro, Simon and the entire Elevate team are amazing. Spiro is friendly, professional and resourceful, and offered lots of tips and advises during and post purchase. Elevate made the whole process less daunting than we anticipated and connected me with a whole network of quality trades and professionals. I highly recommend Spiro and the Elevate team if you are looking to invest in Toronto freehold real estate.
Danielle Dang
October 25, 2023.
Simon and team are top notch. Professional, responsive, provide custom-tailored services, and generate results. Very positive experience. Highly recommend.
