Investing in an expensive/competitive market, GTA Ontario, Canada

[Kyle Bateman]

Hi guys,

I'm looking to get some opinions on starting out buying real estate in a competitive, and expensive, market such as the Greater Toronto Area in Ontario, Canada.

I am a first time home buyer, currently living in the GTA. I am looking to get in to the market, however i fear that the market is simply too expensive to purchase an investment property. For example, the average price of a home, that is equipped with a basement apartment/in-law suite, is approx. $550,000. After expenses, the total monthly amount works out to be around $3,400. Taking into account the average rent income for a basement apartment in my area ($1,500), that leaves $1,800 in expenses. If I were to live in the upstairs for a few years and then decided to rent it once we move out, I can't see obtaining more than $1,800 for rent; I would basically be breaking even.

I am looking for some guidance on how to proceed. Any thoughts, ideas or recommendation would be greatly appreciated.

Thanks for your help.