How to start investing in Ontario real estate (2026)

Five ways people invest in Ontario real estate

• Live in one unit, rent the other. The most common start in the GTA. Owner-occupied 2–4 unit homes can qualify for smaller down payments, and rent helps carry the mortgage.
• Buy a home with a legal second unit. Income from day one, if the unit is properly registered. See our legal basement guide.
• Condo or townhouse rental. Lower entry price, but condo fees and the current condo market (prices down year over year) need careful numbers.
• Pre-construction. Small deposits spread over time, but you carry closing, appraisal and assignment risk. Read the pre-construction guide first.
• Value-add or power of sale. Buy below the market for condition, then fix. Higher risk; see power of sale homes.

Run the numbers before you buy

Work out the monthly cost first: mortgage payment, property tax, insurance, condo fees if any, and a reserve for maintenance and vacancy. Then compare it with realistic rent for that exact property, not an average. At GTA prices and today’s rates, many properties do not cash-flow on rent alone; the return comes from rent plus mortgage paydown plus long-term value. The break-even rent calculator shows the rent a property needs to cover its costs.

Financing rules that matter

• If you will not live in the property, lenders usually require at least 20% down.
• If you live in one unit of a 2–4 unit property, insured financing with a smaller down payment may be available.
• Many lenders count rent from a legal unit when qualifying you; rent from an unregistered suite usually counts less or not at all.
• Talk to a mortgage broker before you shop, so your offer matches what you can actually borrow.

Landlord rules in Ontario

• Tenancies are governed by the Residential Tenancies Act and the Landlord and Tenant Board.
• Units first occupied for residential purposes after November 15, 2018 are exempt from the annual rent increase guideline; older units are subject to it.
• Ontario requires the standard lease form for most residential tenancies.
• Each additional unit must meet the Building and Fire Codes and your city’s rules; in some cities, such as Brampton, units must be registered.

Your first 6 steps

1. Decide your strategy and how hands-on you want to be.
2. Get pre-approved with a lender who understands rental income.
3. Pick 2–3 target areas based on price, rent demand and transit.
4. Shortlist properties and run the monthly numbers on each.
5. Check legal status of any second unit and the building condition.
6. Make an offer with the right conditions, then line up insurance, a lawyer and a property plan before closing.

FAQ