Buying First Property

[Mohamed Mahmoud]

I'm looking to purchase our first property wich will be a rental, as I'm living with family at the moment. I'm thinking of starting small and simple. So a condo apartment close to where I live makes sense. However, it will be probably cash flow negative, as I live in Toronto, Ontario.

Does is it make sense to start this way and get my feet wet as a landlord and go from there?

Thanks!

[Nuno Barbosa]

Hi Mohamed, It really depends on your overall goals and why you're looking to invest in rentals. Condos Rentals in Toronto is an appreciation strategize. Investors run the unit cash flow negative, hoping that the market price will increase enough within a few years. Because of COVID, you can find some decent condo deals in Toronto; however, the rental market could be better. I think with affordable housing such a big part of our current political discussion. You're going to start seeing more crackdowns on Airbnb, which will add more units to the long-term rental markets. Which will lower investor returns in the condo market. I recommend you look outside of Toronto, Areas like Hamilton and Brantford to the west and Durham and Peterborough to the East. For the same price as a Toronto condo, you can buy SFH and rent it out to one family.

The property will run cash flow positive with just one unit. But this will also give you options in the future to add a 2nd suite, maybe even a 3rd suite. 

Best of luck with your search.