Positive ROI hard to find in Toronto

[John Dare]

I want to buy my first property in Toronto (duplex/triplex house-hacking). When I crunch the numbers its hard to find positive ROI in reasonably central Toronto. Once I look outside Toronto I can find a good ROI.

Is there a tradeoff to make whereby buying inside Toronto provides a bad ROI but better property value appreciation, outside Toronto the ROI is good but the property value may grow at a slower rate?

I like in Toronto so would like to buy a Multi-Family home in Toronto to live in one unit and rent out other units, but finding a good ROI seems impossible in Toronto (unless I put a larger deposit down).

I would appreciate your thoughts and advice.

See a typical example below; $1.1m, 4 units, 20% deposit

[Nick Vazquez]

As Theresa said, Toronto is more of an appreciation play. If you buy in Toronto, over time you will be ok but you'd have to financially be able to withstand negative cashflow for the first few years at least. If you're starting out, it would probably be best to look elsewhere and go for a positive rate of return from day one. Unless you have a high income job and can stomach the negative cash flow each month...

You can also look at house hacking something that may be a bit smaller (a semi with a basement apartment) or something like that so you can get in at a lower purchase price and still have your living expenses reduced. There are many options in Toronto and the cities surrounding Toronto. Hope that helps.