Published 2 November 2026 · By Jatin Dua, Broker of Record, RE/MAX Quantum Realty
Usually not with 20% down. A Toronto condo at the October 2026 median of $545,000, financed at 5.14% and rented at the average one-bedroom rent of $2,316, loses about $1,320 a month after fees and taxes in my example. Cheaper markets like Oshawa come closer. Multi-unit homes and bigger down payments improve cash flow.
This guide is for anyone thinking about buying a GTA rental property in 2027, whether it is a first investment condo or a house with a suite. You will see real rent and price figures side by side, two worked examples using current mortgage rates, the down payment rules for rentals, and what it actually takes to make the numbers work.
Does a rental property cash flow in the GTA in 2027?
A typical GTA investment condo bought with 20% down does not cash flow in 2027. At current rates, the mortgage, condo fee, property tax and insurance add up to more than the rent in almost every GTA city. Most buyers who invest today are betting on paying down the mortgage and on future price growth, and they cover a monthly shortfall from their own income while they wait.
That can still be a reasonable plan for some people. It is just a different plan from “the tenant pays for everything”, and you should go in knowing which one you are making.
How much do GTA rentals earn compared with their price?
A quick test investors use is gross yield: one year of rent divided by the purchase price. If the gross yield is below your mortgage rate, a property bought with a normal down payment will almost always lose money each month once fees and taxes are added.
| Area | Condo apartment median price | Average 1-bedroom condo rent (Q2 2026) | Gross yield, 1-bedroom | Average 2-bedroom rent (Q2 2026) |
|---|---|---|---|---|
| City of Toronto | $545,000 (October 2026) | $2,316 | 5.1% | $3,154 |
| Brampton | $415,000 | $2,052 | 5.9% | $2,408 |
| Vaughan | $530,000 | $2,130 | 4.8% | $2,666 |
| Markham | $558,000 | $2,214 | 4.8% | $2,840 |
| Oshawa | $340,500 | $1,918 | 6.8% | $2,277 |
Source: prices from TRREB MLS data via REALM, January–October 2026 median sold price for condo apartments (Brampton, Vaughan, Markham, Oshawa) and TRREB Market Watch, October 2026 (City of Toronto); rents from TRREB Rental Market Report, Q2 2026, average leased condo apartment rents. Medians cover all unit sizes, so the yield column is a rough guide only.
For comparison, RBC’s advertised special offer for a five-year fixed mortgage with 20% or more down was 5.14% on 10 November 2026. Only Oshawa’s one-bedroom yield clears that rate comfortably, and that is before condo fees and property tax.
How much does a typical Toronto investment condo lose each month?
Here is a worked example using a City of Toronto condo at the October 2026 median price and the average one-bedroom rent. The fee, tax and insurance figures are my own assumptions for illustration. Use the real numbers from the listing and the status certificate for any unit you are considering.
| Monthly item | Toronto condo | Oshawa condo |
|---|---|---|
| Purchase price | $545,000 | $340,500 |
| Down payment (20%) | $109,000 | $68,100 |
| Mortgage payment (5.14%, 25 years) | $2,571 | $1,606 |
| Condo fee (assumed) | $650 | $550 |
| Property tax (assumed) | $288 | $300 |
| Landlord insurance (assumed) | $35 | $35 |
| Vacancy and repairs (4% of rent) | $93 | $77 |
| Total monthly cost | $3,636 | $2,568 |
| Rent (average 1-bedroom, Q2 2026) | $2,316 | $1,918 |
| Monthly cash flow | about −$1,320 | about −$650 |
| Of the payment, principal repaid (first year, average) | about $740 | about $460 |
Source: my calculations using Canadian semi-annual compounding; prices from TRREB Market Watch October 2026 (Toronto) and TRREB MLS data via REALM, January–October 2026 (Oshawa); rents from TRREB Rental Market Report Q2 2026; rate from RBC, 10 November 2026. The Toronto tax assumes an MPAC assessment of $450,000 at the 2026 Toronto residential rate of 0.767311%.
Two things to notice. First, part of each mortgage payment is principal, which builds your equity rather than disappearing, so the Toronto example’s true economic cost is closer to $580 a month before any change in price. Second, to break even on cash flow at these assumptions, a Toronto buyer would need to put down roughly $333,000, about 61% of the price. That tells you how far apart rents and prices still are.
Rate changes matter too. On the Toronto example, dropping the rate by one full point to 4.14% lowers the payment by about $244 a month. It helps, but it does not close the gap.
Is a cheaper GTA market like Oshawa better for cash flow?
Closer, but still not positive with 20% down. The Oshawa example loses about $650 a month, and after counting principal repaid, the economic loss is under $200 a month. A break-even down payment there is roughly $178,000, about 52% of the price.
Lower-priced markets usually have higher yields because rents do not fall as fast as prices. They also come with trade-offs: smaller tenant pools, longer selling times and different price trends. Oshawa’s condo apartment median fell 14.3% in January to October 2026 compared with the same period of 2025, and condos there took an average of 51 days to sell, according to TRREB MLS data via REALM. A higher yield does not protect you from a falling price.
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What down payment do you need for a rental property in Ontario?
For a property you will not live in, plan on at least 20%. CMHC does not insure a mortgage on a single-unit property that is not owner-occupied, so a standalone investment condo needs a conventional mortgage. Each lender sets its own method for counting the rent from an uninsured rental when you qualify, and some count only part of it or subtract expenses first. Ask for the method in writing before you shop.
The stress test still applies. You qualify at the higher of 5.25% or your contract rate plus two points, so a 5.14% mortgage is tested at 7.14%. That limits how many properties most people can carry.
The exception is buying a home with two to four units and living in one of them. CMHC insures owner-occupied two-unit homes with as little as 5% of the first $500,000 and 10% of the rest, and three- or four-unit homes with 10% down, up to a $1.5 million purchase price. For an owner-occupied two-unit home, up to 100% of the gross rent from the other unit can be added to your income when you qualify. My guide to buying a duplex or triplex in Toronto explains this route.
Are GTA rents going up or down in 2027?
It depends on the city. Rentals.ca and Urbanation reported on 5 November 2026 that Toronto apartment and condo asking rents rose 1.6% year over year to $2,590 in October, the first annual increase after 32 straight months of decline. Elsewhere in the GTA, rents were still falling: Oakville down 7.7%, Markham 5.4%, Vaughan 4.8% and Mississauga 4.3%. Ontario’s average fell 2.5% to $2,242.
TRREB’s Q2 2026 rental report showed average GTA condo rents below a year earlier, with one-bedrooms at $2,273 (down 2.3%) and two-bedrooms at $3,013 (down 1.7%). TRREB said conditions should keep favouring renters in the near term, but could tighten if leasing keeps growing faster than listings. Nobody can promise you rent growth in 2027. Build your numbers on today’s rent, and treat any increase as a bonus. For more detail by unit type, see my guide to average rent in Toronto for 2027.
How does rent control affect a rental property in Ontario?
It caps how fast you can raise rent on an existing tenant in many units. Ontario’s rent increase guideline for 2027 is 1.9%. Increases need at least 12 months since the last one and at least 90 days’ written notice in the proper form.
Units first occupied for residential purposes after 15 November 2018, including most newer condos and many new basement apartments, are exempt from the guideline, though the 12-month and 90-day rules still apply. That makes newer units more flexible for an investor, and older units more predictable for a tenant. When a tenant moves out, you can set a new rent for the next tenant. My guide to the 2027 rent increase guideline covers which units are exempt.
How can a rental property cash flow in 2027?
These are the levers that actually change the result:
- A bigger down payment. It works, but it means a lot of cash tied up for a modest return.
- Living in one unit of a multi-unit home. Your own housing cost drops, financing is easier and the rental income helps you qualify.
- Adding a legal unit to a house. Two rents from one property, one roof and one property tax bill.
- Buying below recent prices. With buyers holding negotiating power through 2026, patient investors can negotiate. That helps the price, not the rent.
- Lower carrying costs. A lower condo fee, utilities paid by the tenant and a well-maintained building all improve the monthly picture.
For a district-level look at where the numbers hurt least, see my analysis of whether an Etobicoke investment condo cash flows; the same method works anywhere in the GTA.
Do not plan on a tenant always paying on time or a unit never sitting empty. A tenant who stops paying can take months to resolve at the Landlord and Tenant Board, and your mortgage, fees and taxes keep running. Keep at least three to six months of total carrying costs in reserve before you buy, and screen tenants carefully within the law.
What are the biggest risks for GTA landlords in 2027?
Beyond tenant risk, watch three things. Rates: the Bank of Canada raised its policy rate to 2.50% on 28 October 2026, and prime rose to 4.70%, so a variable-rate investor’s payment already moved up. Fees: condo fees and special assessments can rise faster than rent. Price: condo apartment medians fell between 10.9% and 14.3% in Brampton, Vaughan, Markham and Oshawa in January to October 2026, so equity is not guaranteed.
I tell investor clients to run the numbers three ways: at today’s rent, at a 5% lower rent, and at a rate one point higher than today. If you can comfortably cover the shortfall in all three, and you plan to hold for at least five to ten years, a GTA rental can still make sense in 2027. If the plan only works if rents rise and rates fall, I would wait or look at a property with more than one unit. Also remember that rental income is taxable; my T776 rental income guide covers what you can deduct.
What to do next
- Pick two or three target areas and pull recent leased rents for the exact unit type you want to buy.
- Get a mortgage pre-approval for an investment property, with the rate and the rental income method in writing.
- Build a monthly budget with real fees, taxes and insurance, and test it at a lower rent and a higher rate.
- For condos, read the status certificate and reserve fund study before you firm up.
- Set aside a cash reserve covering at least three to six months of carrying costs.
Need help with this? Talk to me.
I’m Jatin Dua, Broker of Record at RE/MAX Quantum Realty, and I’m the best agent to do this kind of work for you in Toronto and across the GTA. Over $100 million in GTA sales and 100+ families helped sell. Feel free to contact me any time: call or text 833-330-1925 or email [email protected].
Frequently asked questions
Does a rental property cash flow in Toronto in 2027?
A typical Toronto investment condo bought with 20% down does not cash flow in 2027. Using the October 2026 City of Toronto median condo price of $545,000, a 5.14% five-year fixed rate and the Q2 2026 average one-bedroom rent of $2,316, my example loses about $1,320 a month after fees and taxes. About $740 of each payment is principal, which builds equity.
Is buying a rental property a good investment in 2027?
It can be if you can cover a monthly shortfall and hold for five to ten years. In the GTA in 2027, most condos bought with 20% down cost more to carry than they rent for, so returns depend on paying down the mortgage and future prices. Multi-unit homes where you live in one unit, or larger down payments, improve the numbers.
How much down payment do I need for a rental property in Ontario?
At least 20% for a property you will not live in, because CMHC does not insure mortgages on single-unit properties that are not owner-occupied. If you buy a two-unit home and live in one unit, the minimum is 5% of the first $500,000 and 10% of the rest; three- and four-unit owner-occupied homes need 10%, up to a $1.5 million price.
What rental yield can I get in the GTA?
Gross yields on GTA condos are roughly 5% to 7% in 2026 data. Comparing January to October 2026 median condo prices with Q2 2026 average one-bedroom rents gives about 5.1% in Toronto, 5.9% in Brampton, 4.8% in Vaughan and Markham, and 6.8% in Oshawa. Net yields are lower after condo fees, property tax, insurance and vacancy.
Are rents going up in Toronto in 2027?
Toronto asking rents started rising again in late 2026. Rentals.ca and Urbanation reported Toronto apartment and condo rents up 1.6% year over year to $2,590 in October 2026, the first annual increase after 32 months of declines. Other GTA cities were still falling, including Mississauga, Vaughan, Markham and Oakville. No one can guarantee 2027 increases.
Can I raise the rent on my tenant in Ontario in 2027?
Yes, within limits. Ontario’s 2027 rent increase guideline is 1.9% for most units, with at least 12 months between increases and 90 days’ written notice in the proper form. Units first occupied for residential purposes after 15 November 2018 are exempt from the guideline, but the 12-month and 90-day rules still apply to them.
Is Oshawa a good place to buy a rental property?
Oshawa offers higher gross yields than most of the GTA but still does not cash flow with 20% down in my example. A condo at the 2026 median of $340,500 renting at the Q2 2026 average one-bedroom rent of $1,918 loses about $650 a month at 5.14%. Oshawa condo medians also fell 14.3% in January to October 2026.
How much rent do I need to break even on a Toronto condo?
At a $545,000 price, 20% down, a 5.14% rate over 25 years and my assumed $650 condo fee and $288 monthly property tax, a Toronto condo needs about $3,690 a month in rent to break even, including a 4% allowance for vacancy and repairs. That is well above the Q2 2026 average two-bedroom condo rent in Toronto of $3,154.
Does the stress test apply to investment properties in Canada?
Yes. Federally regulated lenders qualify borrowers at the higher of 5.25% or the contract rate plus two percentage points, including for rental properties. A 5.14% investment mortgage would be tested at 7.14%. Each lender also sets how much of the expected rent it counts, so the stress test usually limits how many rentals one buyer can carry.
Sources
- TRREB — Rental Market Report, Q2 2026
- TRREB — Market Watch, October 2026
- Rentals.ca and Urbanation — National Rent Report (5 Nov 2026)
- RBC Royal Bank — Mortgage rates
- CMHC — Rental income
- CMHC — Purchase (homeowner loans, 1 to 4 units)
- Government of Ontario — Rent increase guideline
- City of Toronto — Property tax rates and fees
Related reading
- Biggest Condo Developers in Toronto: Track Records Buyers Should Check
- Is It a Good Idea to Buy a Condo in Toronto in 2027?
- Buying a House in Ontario on a Work Permit (2027): What the Foreign Buyer Ban Allows
- Can You Buy a House With No Down Payment in Ontario?
About the author — Jatin Dua, Toronto and GTA real estate broker
I am Jatin Dua, Broker of Record and co-founder of RE/MAX Quantum Realty Inc., Brokerage, Unit 101, 799 The Queensway, Toronto. I work with buyers and sellers across Toronto and the GTA and have helped more than 100 families sell. Four-plus years of active GTA transactions and over $100 million in sales volume.
Reach me at [email protected] or 833-330-1925, or book a call.
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