Compass to investment properties

There’s more to becoming a landlord than just buying a property and renting it out. You need to outline your investment goals, your available time for maintenance and upkeep, and how much you’re willing to invest.

You could easily purchase a condo and rent it out to a well-qualified candidate, and put your duties on the back burner. But landlords looking for a larger return on investment are turning to freehold homes with a couple of apartments. Some are even turning to services like Air BnB to get more out of their initial investment.

Becoming a Landlord in the GTA is a no easy feat, but it has proven well-worth it for thousands of investors. Let’s take a look at the most common investments, financing, and the legal constraints of owning a multi-unit home.

The most common investment is owner-occupied units

Most landlords can’t afford to own more than one home, so their first investment into being a landlord is usually a home with a basement apartment or a garden suite.

This is the best case scenario for someone trying to get into a coveted neighborhood at the top of their budget. They get to live in their dream home, and have auxiliary income from the apartment to qualify for and pay off the mortgage.

This is also the easiest investment to finance. Since the home is your primary residence, you can put down a significantly smaller down payment. In some cases, you can also use the separate apartment’s rent to qualify for the mortgage.

Renting out your basement apartment, or garden suite, on Air BnB is also a fantastic option to get your feet wet as a landlord.

How much time do you want to invest into being a landlord

The next level of investment would be buying a rental condo, a duplex, or a multi-unit apartment. Buying an investment property that is occupied solely by tenants requires a 20% downpayment.

At this point, you need to decide how much time you have to invest. The easiest investment is a condo apartment, where the monthly maintenance fee covers maintenance. With a condo, all you have to worry about is collecting rent and paying the mortgage, taxes, and maintenance.

The next level of commitment, is buying a duplex or multi-unit investment. The downside to this is that you’re responsible for maintenance, but freehold homes like these usually appreciate better than their condo counterparts.

Making sense of the cents

Making an investment like this work usually takes some knowledge of taxes and a decent grasp of accounting. Because the property will be subject to capital gains taxes when you sell it, you want to rack up the ownership costs. You want a mortgage, maintenance costs, etc, because you can claim them back against the income it generates. You can also claim your expenses (like the mortgage interest) against the capital gains taxes once you sell the investment property.


Example: Fiona decides to leverage the equity she has in her family home in the City. Her home has appreciated considerable in the last 5 years, and is worth $1,000,000. Her mortgage on the home is only $400,000, so she takes a home equity line of credit against her home and uses that as a deposit on her condo apartment investment. The home equity line of credit is an interest only loan, so there is no principle paid off. Since the loan is for the investment into a condo, the interest on her loan is a tax deduction against the investment. The Realtor fees, lawyers fees, closing costs, and maintenance are also tax deductions for her investment.

Because it’s an investment home, the lender will require at least a 20% down payment. But, if you have equity in your current home, you can leverage that to make the down payment.

Legal and non-legal | Conforming and non-conforming apartments

This is where things get tricky. It’s important to do your due diligence. For a residence to be considered legal and conforming it needs to comply with:

  • Local By-Laws
  • Fire Code
  • Building code
  • Electrical Safety
  • and, it has to be registered with the city.

Some multi-unit homes, and also basement apartments, will not conform to current by-laws and code. But you could be allowed to buy the property and continue its current use under certain circumstances. That’s called legal non-conforming. However, a legal non-conforming apartment can’t be extensively renovated without bring it into today’s codes. This could be very costly.

If you’re buying a home with a basement apartment, or a building with multiple apartments, you need to ask your representative about all its limitations and balance those against the price.


Airbnb, and its risks and benefits

AirBnB has received a lot of undue criticism recently. But it’s actually a very smart choice for landlords with the extra time to invest. AirBnB carries a $1 million dollar insurance policy for vandalism and theft. In addition, Airbnb gives you MORE control over your investment. Renting through AirBnB overrides tenant rights — because it’s not a lease, it’s a license. You can evict a licensee much easier than you can evict a tenant.

In the very rare instance a Airbnb guest damages your home, Airbnb will cover the damages and also the lost revenue while your listing is down.

AirBnb is not for everyone though; you need to invest time:

  • In getting a good rating
  • Being readily available for questions and concerns
  • Keeping the unit impeccably clean
  • Changing sheets,
  • And, being ready for the TV breaking or internet going down while guests are staying there.


Becoming a Landlord can be a very rewarding experience. We pride ourselves on helping people like you find the right investment.

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