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When most people think about Canada, Toronto is one of the first cities that comes to mind. Serving as capital of the province of Ontario and home to the largest population in the country, it is no surprise that Toronto will always be home to strong real estate investment potential.
However, there is much more to Toronto than simply ‘big city investing,’ in fact the city has very diverse communities that can offer all sorts of living experiences for renters and investors of all sizes. While the sheer number of options available can easily make the Toronto real estate market intimidating at first, once you take the time to research the neighbourhoods and communities in the city, the city becomes much more manageable to explore.
So, if you are ready to dive into the heart of Ontario and Canadian real estate, then look no further than the Toronto real estate market and all of its many benefits. As well, if you would like to learn how to finance these investments, you can click the link below to book a free strategy to discuss your Toronto property investments.
Canada’s Largest Population Centre
Toronto Ontario is the largest city in all of Canada by population. With a population of approximately 2,800,000 people the city is home to over 7 per cent of the entire country’s population.
Naturally, this massive population within the city has resulted in housing demand remaining consistently high throughout the year – a factor which greatly impacts the profitability of real estate investing.
The population of the city plays a key role in the type of residential properties and rentals that are in-demand, notably multifamily properties, and houses with the potential to create additional dwelling units.
A Canadian Tourism Hub
Toronto is also a massive tourism hub with plenty of attractions that bring visitors from across Canada and beyond into the city to explore and thrive.
The city is home to a variety of attractions ranging from sports complexes and arenas to museums and galleries, to performance spaces and beyond.
One of the most notable places that people visit in Toronto is the Toronto Eaton Centre – a massive mall in Downtown Toronto with over 230 stores and services operating within the building.
Other attractions include the Toronto Zoo, Ripley’s Aquarium, the Art Gallery of Ontario, the Ontario Science Centre, and the Hockey Hall of Fame.
The high volume of tourist attractions in the city causes a demand for short-term rental properties within the city in order to accommodate the visitors who come into the city. These short-term rentals are also often frequented by travelling professionals who need to temporarily work or travel to Toronto.
A Business Hub
Due to its massive size and centralized location, Toronto real estate is a hub for businesses in Ontario. So, that makes it a natural choice for investors who want to invest in commercial and business real estate.
As the heart of both the Greater Toronto Area (GTA) and the Greater Golden Horseshoe (GGH), as well as the largest city in the country, many companies strive to establish their main office or satellite locations within the city in order to keep themselves at the heart of modern business. However, instead of buying their own buildings, it is incredibly common for these companies to rent floors in some of the larger office structures in the city in order to suit their needs.
So, by buying these properties or developing new ones with enough room to accommodate the companies who need them, investors can find great success through these commercial investments.
Ideally, to make these investments more reliable, you should make an agreement with an existing company to serve as an ‘anchor tenant’ – the company which both pays the largest rent for the best part of the property and attracts other renters to the property who want to benefit off of the close proximity to the anchor.
Consistent and Reliable Appreciation
While the Toronto real estate market is often considered too expensive for investors who are looking to primarily earn cash flow and live off the month-to-month income made by their properties, the city is regarded quite highly for another form of real estate profit being easy to come by in the city.
Due to the constant demand and recognition that properties in the Toronto real estate market experience, they are known for appreciating quite significantly and reliably.
In fact, over the past two years it has been estimated that single-family homes in the Toronto real estate market have increased in value by nearly 20 per cent year-over-year. As well, the average appreciation rate for Toronto real estate since 1998 is estimated to be approximately 17 per cent.
For investors who are willing to receive lower amounts of cash flow or potentially manage a negative cash flow balance on a property, that appreciation can be the key to massively growing a portfolio full of new properties on top of their existing investments at a rate that is virtually unrivaled by properties in other Ontario cities.
Discover How To Buy Unlimited Rental Properties With This Step By Step Guide
A Diverse Community
Toronto offers a very diverse community with many different classes of real estate and rental properties for investors to choose from.
In prime neighbourhoods within the city the average rental price on a studio apartment can go for $1795 on average. Meanwhile in smaller communities, studio apartments can be found for significantly less. This provides a level of flexibility for investors who wish to accommodate different classes and groups of people within a single residential market.
Education and Development
Toronto is home to some of the largest and most well-regarded schools in Ontario including York University, the University of Toronto, and Toronto Metropolitan University.
This contributes to a massive demand for student housing within the city – a niche that is appealing to many investors looking to maximize cash flow on their properties as many student rentals can be offered by the room instead of by unit, thus increasing the total number of tenants in a single property.
Toronto Real Estate is Leading The Greater Toronto Area
Toronto is the largest city and the namesake of the GTA (Greater Toronto Area) – a region with a total population of over 6.7 million people across 25 municipalities. This positions Toronto as a business and employment hub for the region, with many people striving to move into the area in order to be part of the action.
Key International Infrastructure
Toronto is home to the Toronto Pearson International Airport – the largest international airport in the country. This provides easy access to both international travel and international trade to businesses and investors in the region.
As a result, commercial tenants who need access to that international infrastructure will often be willing to pay a premium in order to be close to the airport in order to cut down on travel and transportation costs prior to paying for airport services.
Large-Scale Multifamily Investments in Toronto Real Estate
While cities with large and growing populations are naturally going to need large multifamily properties in order to properly accommodate the city’s residents without being forced into massive amounts of urban sprawl. However, more than any other Canadian city, the Toronto real estate market is in desperate need of new multifamily housing developments to suit its ever-growing domestic population.
In summer of 2022, Toronto’s vacancy rate hit a low of 1.4 per cent. While this meant that investors were not struggling for tenants, it did mean that the amount of room for people to move and for new residents to come into the city was significantly lower.
By 2030, it is estimated that Toronto will grow into a city of approximately 3.5 million people. However, the city does not currently have nearly enough housing to accommodate 700,000 new residents within the next seven years. So, the city is in need of developers who want to make large apartment complexes, condominiums, and housing developments so that the population growth is not stunted, nor does it force the local housing market beyond anyone’s affordability.
Toronto Real Estate – Investing in The Heart of Ontario
Ontario’s capital city – Toronto is a city that is infamous in the world of real estate investment for its high prices and fast-paced market. However, the truth is that much like any city, as long as you are smart about building a plan and using the right resources to get ahead, the Toronto real estate market can be managed by both new and seasoned investors alike.
Kick off your investment strategy with a reliable mortgage team by giving us a call at LendCity. Our team will gladly help you connect with some of the top lenders in order to ensure you receive the best available financing for each of your investment properties every single time.
Toronto Real Estate Professionals
We have searched high and low for real estate investing professionals in Toronto. Below, you can find professionals we have researched and can confirm they specialize in working with Real Estate Investors.
To ensure the maximum success in real estate investing in Toronto, or any city, you should always use professionals who understand and work with investors, your income depends on it.
This list may not fully list all the professionals in the area, but the ones we have personally investigated and that we would refer our clients to.
If you’re a real estate professional and would like us to consider adding you to the list, please contact us.
If you are ready to dive into the Toronto real estate market, click the link below for a free strategy call with our team at LendCity.