Best Toronto Suburbs for Real Estate Investors

| Investing

If investing in Toronto real estate is too expensive, the Toronto suburbs offer lower priced properties and comparable rent to generate income. You just need to know where to look!

Here we share our top tips for finding the best Toronto suburbs for investors to help you generate a respectable passive income while building low-risk equity.

College Towns: Tapping Into the Student Market

Areas like Durham, Mississauga, Vaughan, and Kitchener-Waterloo are all post-secondary areas where a constantly renewed source of renters is generated each year. As graduates leave, the new kids on the block arrive, keeping demand steady. Even with the government’s reduction of international students, we still see demand for student housing every year for both undergrads and those entering graduate programs pursuing their Masters and PhDs.

For example, when you look at the Mississauga campus for U of T, the campus only accommodates about 10% of the students. With about 16,000 students arriving each year, this means there’s a continuous demand for housing in the area. In Oshawa, the landscape surrounding the Ontario Tech University and Durham College campus has changed dramatically with towering condos popping up alongside campus housing and tons of amenities.

Looking for more Toronto options for your next investment? Read our top 4 Foolproof Toronto Neighbourhoods for Investors here.

While you might worry cash-poor students are more likely to skip out on rent, most are receiving financial assistance whether it’s from the Bank of Mom and Pop, grants, student loans, etc. so they tend to have a reliable source of income. Their success depends on housing if they want to graduate and see their investment in their education pay off.

That said, there are some words of caution when it comes to renting to students, aka, noise, destruction of property and constant complaints from neighbours. For example, campus adjacent rented houses and townhouses in Oshawa created a neighbourhood nightmare for local residents and police who were constantly called for various complaints. So, you need to be incredibly careful in your selection of students, which isn’t always easy! Also, it’s probably best to invest in a condo apartment where the majority of the residents will be student renters as opposed to a house or townhouse where homeowners will be more likely to complain about the noise.

Do you have more questions about investing in Toronto real estate? Here are a few more posts you might find interesting:

Tech Boom: Leveraging the “Corridor”

Ontario is home to one of Canada’s primary economical drivers: tech. That means you have lucrative opportunities, especially when looking at areas along what is known as the Toronto-Waterloo Corridor. The towns dotting the corridor heading west from Toronto towards Waterloo are hubs where the tech community is seeking rental and housing opportunities. In fact, this is the third largest tech hub in North America, with over 15,000 tech companies employing more than 343,000 Ontarians.

So, areas such as Mississauga, Milton, Halton Hills, or further out where you reap the benefits of both students and techies in Kitchener-Waterloo and Guelph can provide ample opportunity to find gainfully employed individuals with respectable incomes looking for higher end rentals.

On the negative side you could see higher churn as people settle into their jobs and decide to purchase a home. On the positive side, you could sell your home to your tenants when the timing is right!

Wondering how to sell a tenanted property in Toronto? Read all about it right here.

Rental Market Growth: Finding Affordable Properties

If you have a limited budget, Durham’s proximity to downtown TO including a reliable train ride into Union and the 407 extension has made it a more attractive option for renters who can’t afford life in Toronto. You’ll not only find more affordable options in areas like Pickering and Ajax, but a growing number of new build condos you can get for a very reasonable price.

Rental market growth in Durham is driven by several incentives for renters:

  • Lower rent compared to Toronto
  • Larger living space for the money compared to Toronto
  • Proximity and accessibility to Toronto
  • Proximity to U of T Scarborough, Centennial College, Durham College, and Ontario Tech University

All of these things will help boost demand, allow you to maintain a reasonable income and build impressive equity.

For example, in Ajax, you can find 1-bedroom condos available in the low $500ks which demand an average rent of $2150 and 2-bedroom units in the mid $500ks which see an average rent of $2350. At the same time prices have seen steady growth for the most part, making Durham condos a safe equity builder.

Part of being a successful real estate investor is hiring an investor-friendly real estate agent. Read our post about how to find one right here.

Infrastructure Growth: The Next Boom Towns

The final booster for investment properties is infrastructure growth. Areas where commuting is easier, new industry is arriving and amenities are increasing, are all important considerations in spotting a good real estate investment. They all contribute to a possible boost in both property value and demand for rental housing.

For example, the development of Milton Education Village was designed to accommodate new campuses for Wilfrid Laurier University and Conestoga College in the town of Milton. Located just south of Derry Road, west of Tremaine and north of Britannia Road, this completely new concept neighbourhood will include its own main street and amenities. With the opening of both campuses in 2024, major growth is expected as demand for housing increases for students, college staff and employees attracted to new businesses located in the unique concept community. These factors add up to a great opportunity for growth in property values as well as continuous tenant demand to generate income.

Still have questions about investing in Toronto? Here are some more posts to read next:

The Bottom Line

Real estate investment is all about location, generating income and building equity to see the best ROI. Working with a savvy real estate team like us is the first step to ensuring you find the right opportunities to meet your investment goals!

The Christine Cowern Team can help with your real estate investment plans. Give us a call at 416.291.7372 or email us at hello@christinecowern.com. We’d love to work with you!