The hard truth about GTA condos
A pre-construction 1+den in downtown Toronto closing in 2026 at $850/sqft, rented at $2,650/month, with 20% down and a 5.05% mortgage, typically posts a negative monthly cash flow of $700,$1,100. That's before vacancy, special assessments, and management.
That doesn't mean condos are wrong, it means appreciation has to do all the work, and your underwriting must price that risk.
Where the math still works
- Multi-unit Etobicoke and East-end Toronto, legal duplexes and triplexes near transit
- Mississauga purpose-built freeholds with a basement apartment
- Hamilton-adjacent and Niagara for cash-flow-first portfolios
- Commercial mixed-use, see Commercial
How I underwrite
For every property I model:
- Gross rent (verified against current comps, not pro-forma)
- 5% vacancy + 8% management even if you self-manage
- Capex reserve (1,2% of property value annually)
- True debt service at stress-test rate
- Net cap rate and cash-on-cash return
If the deal needs hand-waving, it's not a deal.