As we approach the start of a new year, I’m having a lot of conversations with clients and friends about investment properties.

I know I’m in the right business when I get pretty damn excited about those conversations.

The thought of helping people grow their wealth and fund the lifestyle they want through real estate just gets me going.

As such, I’m thrilled that I’m currently working with four clients who want to find investment properties.

The budgets may be different, but each of them is looking for the same thing – a property that cashflows well and that they can use over time to continue to grow their real estate empire.

As part of working with these clients, I regularly look at what multi-unit properties are available for sale in the GTA.

While the city of Toronto is of course part of the GTA, it’s rare that we find good investment properties in Toronto itself.

That’s because property prices in Toronto have appreciated so much that for investors the numbers just don’t work.

While it might be easier to rent out a Toronto property due to demand, the rental rate you can charge hasn’t grown at the same rate as the sale price.

The best way to show that is to look at two real life examples.

One is in Toronto, one is in Oshawa.

The Toronto triplex is near Dufferin & Rogers, not too far from the Corso Italia.  It’s a corner property in a mixed use neighbourhood that isn’t particularly fancy.

The Oshawa triplex is near Simcoe & Olive, pretty much in the heart of central Oshawa.  The street is nothing special and neither is the neighbourhood.

If you want to buy the Oshawa triplex, the asking price is $499,000.  The Toronto triplex has an asking price of $1,099,000.   That’s more than double the Oshawa triplex price.

The question is, is the Toronto property twice as good as the Oshawa property?  Let’s take a look.

In order to compare apples to apples, we’re going to say the investor has $200K available to put into a property.  That includes the legal, bank and land transfer tax they have to pay as part of the purchase.

The mortgage interest rate will be the same at 2.69% for a five year term and the legal and bank fees will be the same budgeted amount of $2500.

The variables that differ that will go into the analysis are:

  • Purchase price
  • Land transfer taxes
  • Mortgage amount
  • Property taxes
  • Utilities
  • Rental income

When I reviewed the two properties using this structure, here’s what I found.

The below chart shows a side by side comparison of the two properties.  Click on it to open a PDF of the file.

We can see that the Oshawa triplex makes $370 per month in positive cashflow.  The rental rates in Oshawa, while significantly lower than the Toronto triplex (less than half in fact), are more than offset by the significantly lower mortgage due to the lower purchasing price.  We also save on lower land transfer taxes which means more of the $200K can go into a downpayment.

The Toronto triplex loses $65 per month in negative cashflow.  The upfront costs are higher due to the Toronto land transfer tax as well as the Ontario one, which means less of the $200K is available for the downpayment.  The mortgage of $939K costs enough on a monthly basis that the rental income isn’t enough when we add in the property tax and utilities.

If an investor looks at putting $200K into a property, from a cashflow perspective the Oshawa property is much more appealing.  Over a five year period, the property would cashflow over $20,000, which means significant equity would be available when sold or refinanced.

If you or someone you like is considering an investment property, please reach out to me to chat further.  The cashflow analysis above is the first step in assessing investment properties and I’d be happy to chat about what else we consider.  If growing your wealth through real estate is of interest, I’d love to be responsible for what comes next.





No one can be close to others, without frequent opportunities to be alone.

This design lesson teaches that even the most extroverted of people needs a space to call their own where they can recharge and be alone.  A key aspect that is often overlooked is that the room needs to afford both visual and acoustic privacy.  That is a place where not only can no one see you, no one can hear you.

I have seen many homes where one bedroom is located quite close to common areas.  While this may seem like a reasonable way to give someone their own private space, the closing of a door is not sufficient if playing music or talking on the phone is audible to others in the common areas.  If you have ever been in a spare room at a house located next to the kitchen or living room, you know that not all rooms are created equal!

Wherever possible, make private rooms a good distance away from the common areas and use rooms that are in close proximity for another purpose.