Cash flow, cap rates, multiplexes, financing, taxes and the rules that limit short-term rentals — plain answers for anyone buying GTA real estate as an investment in 2026.
Is it worth it
Does a Toronto investment condo cash-flow in 2026?
Usually not with a typical down payment. With prices, condo fees and interest rates where they were in 2026, most newly bought Toronto condos rented at market rates cover their costs only with a large down payment; many investors are relying on future appreciation and paying down the mortgage rather than positive monthly cash flow.
Full guide: Does an investment condo cash-flow?Try it: Condo value estimator
Last reviewed October 2026 · Jatin Dua, Broker of Record
What is a cap rate?
The capitalization rate is a property’s net operating income — rent minus operating costs, before mortgage payments — divided by its price. A $1,000,000 property earning $40,000 a year in net income has a 4% cap rate. It lets you compare properties regardless of how they are financed.
Full guide: Cap rate, NOI and DSCR explained
Last reviewed October 2026 · Jatin Dua, Broker of Record
Should I sell my condo or rent it out?
Compare the after-tax cash flow and expected appreciation of keeping it with what you would net by selling and investing elsewhere. Remember that once it is a rental, future growth is no longer covered by the principal residence exemption, and you take on tenancy rules that make it slower to sell vacant later.
Full guide: Sell or rent out my condo?Try it: Condo value estimator
Last reviewed October 2026 · Jatin Dua, Broker of Record
Is Mississauga a good place to invest in real estate?
It offers lower entry prices than Toronto, no municipal land transfer tax and large rental demand, but condo supply was high in 2026 and the Hazel McCallion LRT has no published opening date. Treat transit as a future upside, not the reason the numbers work.
Full guide: Investing in Mississauga in 2026
Last reviewed October 2026 · Jatin Dua, Broker of Record
Multiplexes and small rental buildings
Can I build a fourplex in Toronto?
Yes. Since May 2023 Toronto allows up to four units on residential lots city-wide, and sixplexes are permitted in the Toronto and East York district and Ward 23. Building permits, servicing and zoning performance standards such as height and setbacks still apply.
Full guide: Buying a duplex or triplex in TorontoTry it: What can I build on my lot?
Last reviewed October 2026 · Jatin Dua, Broker of Record
What is CMHC MLI Select?
MLI Select is CMHC’s insurance program for rental buildings of five units or more that rewards affordability, energy efficiency and accessibility with higher loan-to-value, longer amortization and lower premiums. It is popular for financing new multiplex and small apartment projects.
Full guide: MLI Select and multiplex financing
Last reviewed October 2026 · Jatin Dua, Broker of Record
Are rooming houses legal in Toronto?
Yes. Since 31 March 2024 Toronto permits multi-tenant houses across the city, but every one must be licensed by the City and meet fire, building and property standards.
Full guide: Basement, garden suites and multiplexes
Last reviewed October 2026 · Jatin Dua, Broker of Record
How do I make a basement apartment legal in Toronto?
Get a building permit for the conversion and meet the Ontario Building Code and Fire Code requirements for the unit — ceiling height, egress windows, fire separation, smoke and carbon monoxide alarms and separate heating and ventilation where required. An unpermitted unit can be a problem for insurance, financing and resale.
Full guide: Legal basement apartments
Last reviewed October 2026 · Jatin Dua, Broker of Record
Taxes
Do I pay capital gains tax on a rental property in Ontario?
Yes. When you sell a rental property, half of the capital gain is included in your taxable income, because the planned increase to the inclusion rate was cancelled in March 2025. Any capital cost allowance you claimed is recaptured as income in full.
Full guide: Rental income and capital gains
Last reviewed October 2026 · Jatin Dua, Broker of Record
What expenses can a landlord deduct in Canada?
Mortgage interest (not principal), property tax, insurance, condo fees, utilities you pay, repairs and maintenance, property management fees and advertising, reported on form T776. Improvements that last are capital costs, claimed through capital cost allowance rather than deducted in one year.
Full guide: Rental income tax and the T776
Last reviewed October 2026 · Jatin Dua, Broker of Record
Is the Underused Housing Tax still in effect?
No. The federal Underused Housing Tax was eliminated starting with the 2025 calendar year, so most owners no longer file it. Toronto’s own Vacant Home Tax still applies within the city.
Full guide: Toronto vacant home tax
Last reviewed October 2026 · Jatin Dua, Broker of Record
Rules for investors
Can I Airbnb an investment condo in Toronto?
No. Toronto allows short-term rentals of under 28 days only in the operator’s own principal residence, with City registration; an investment property cannot be used for short-term rental, and many condo buildings ban it outright.
Full guide: Short-term rental rules in Toronto condos
Last reviewed October 2026 · Jatin Dua, Broker of Record
How do I buy a second property in Ontario?
You need at least 20% down on a rental you will not live in; a second home you will use yourself can qualify for less with some lenders. Lenders count part of expected rent toward qualifying, and you pay full land transfer tax with no first-time refund.
Full guide: Buying a second property
Last reviewed October 2026 · Jatin Dua, Broker of Record
How much down payment do I need for an investment property?
Generally 20% for a rental property with up to four units, because mortgage default insurance is not available on non-owner-occupied rentals of that size. Owner-occupied duplexes to fourplexes can be bought with less, under insured programs.
Full guide: Buying a second property
Last reviewed October 2026 · Jatin Dua, Broker of Record
What should I check before buying a tenanted property?
The lease and rent ledger, whether the unit is rent-controlled, any notices or Board proceedings, deposits held, and whether the tenant intends to stay. You inherit the tenancy as it is, so get those documents as a condition of your offer.
Full guide: Buying a condo with a tenant
Last reviewed October 2026 · Jatin Dua, Broker of Record
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Jatin Dua · Broker of Record · RE/MAX Quantum Realty · Toronto and the GTA