12 Best Real Estate Investing In Canada Options (2024)

Real estate has long been one of the most popular and sought-after forms of investment in Canada.

66.5% of Canadians own their own home, according to Stats Canada. Though with property costs still sky-high, many Canadians (especially younger ones) can’t afford to invest in real estate by buying a property outright.

You don’t have to go all in and invest your entire life savings into real estate anymore. There are many different ways to get exposure to this asset class, and I’ll go over the best real estate investing in Canada options below.

Is Now a Good Time to Invest in Real Estate?

Real estate investment is a fantastic way to invest in an income-generating asset, and Canada is seen as a safe and stable country to invest in.

Like most investments, the answer to whether now is a good time to invest depends on your risk tolerance, time horizon, and investment goals.

If you believe that the housing market will decline in the short term, as many experts do, it depends on what strategy you are choosing. If you’re investing with a shorter-term strategy, such as property flipping in the list below, then perhaps you may want to rethink your plan.

If, however, you want to invest in a principal residence to live in for the long term and have no plans of selling it for years or even decades, the timing of when you purchase a property is not as important, and you might want the peace of mind of owning a property even if it drops in value in the next few years.

Strategies and Tips for Successful Real Estate Investing

Enhance your investment approach with these strategies:

  1. Start Small: For those new to real estate, begin with a modest investment to grasp the ropes. A smaller property can help you understand the challenges and rewards without overwhelming financial risk.
  2. Location, Location, Location: Urban migration, future infrastructure projects, and upcoming commercial developments can all influence property demand. Being ahead of these trends can position you for greater returns.
  3. Build a Network: Attend real estate seminars, join online forums, and be present at local city council meetings. The more integrated you are in the community and the industry, the better positioned you are to hear about opportunities or threats early.
  4. Long-Term Perspective: The most substantial real estate fortunes weren’t made overnight. They came from strategic purchasing, patient holding, and timely selling.

Best Real Estate Investment Options in Canada

1. Principal Residence Property Investment

The first and arguably the most important method for real estate investing in Canada is the principal residence property investment. Purchasing a principal residence (or primary residence) is a long-standing approach to investing in real estate.

When you buy a principal residence, you don’t just buy a place to live in – you are making a long-term investment.

When you own a principal residence, you’re not helping your landlord pay their mortgage. You are paying off your own mortgage and growing your wealth. To purchase your own residence, you need to save up capital for a down payment.

Remember that when you purchase a residential property, its status as a principal residence is a crucial tool for you in terms of financial planning.

The Canada Revenue Agency (CRA) allows you tax exemption from any profits you earn by selling a principal residence.

This exemption is crucial when it comes to real estate investing in Canada. All properties you own are subject to tax when they increase in value. This value appreciation is called a capital gain, and any asset that grows in value is subject to capital gain tax.

When you sell a property, you are liable to pay capital gains tax on half the profit you earn from selling it. If you are selling a principal property, however, the CRA provides you with a complete exemption on all capital gains tax you would otherwise owe on the transaction.

Besides the principal residence status, there are several things you need to consider when you are investing in real estate.

Things To Consider When Buying Your Principal Residence

The cost of the property is a primary factor you should consider. However, there are a few more things you should keep in mind when you are buying your principal residence:

A) Your debt-to-income ratio

If you have the money to buy the property, you should purchase the house for cash. You can also afford to buy a house if you have enough for a down payment and you qualify for a mortgage on a new home.

Real estate investors with a bad debt-to-income (DTI) ratio might not qualify for a mortgage on a new house. Make sure you have a decent DTI ratio before you buy a property.

B) The housing market situation

A sound personal financial situation is not the only factor to consider. Purchasing a house is a considerable investment, and the housing market is different now compared to what it used to be.

Previous generations enjoyed massive profits through the property they owned by selling it several years later. Many homeowners lost significant money when the housing market crashed a decade ago.

Although Canadian real estate may seem like it always goes up, this will almost certainly not be the case forever.

C) The economic environment

Similar to the housing market situation, the economy is a significant factor to consider. There are times when the housing market is down and years when it is exorbitantly priced.

In an economic environment where the housing market prices are incredibly low, you can enjoy terrific long-term gains if you buy property at a bargain.

D) Consider your lifestyle

When you’re purchasing a principal residence, it will be a place you will call home for a while. Consider your lifestyle and the suitability of the residential property based on your needs.

You need to buy a house for which you can afford the mortgage and meet your residence needs. You are investing in a home when you purchase a primary residence – not simply buying a house.

E) Should You Rent or Buy?

Here’s an excellent video that can help you decide whether or not to buy or rent your home.

2. Buy And Hold

Another traditional method of real estate investing in Canada is to create a buy-and-hold strategy. Here are a few ways you can profit from buying and holding onto your property:

  • You can purchase a single-family home and rent it out to a family.
  • You can purchase a multi-family home, live in one of the units, and rent out the rest.
  • Purchase a multi-family home and rent out all of the units.
  • Profit from the eventual sale and price appreciation of the unit.

A successful buy-and-hold strategy can help you generate significant income from your property through rent.

It can help you eventually cover the mortgage costs and earn a profit. The longer you hold on to the property, the more potential appreciation you can enjoy for the property value.

3. Residential Rental Income

Residential Rental Income

An excellent way to use real estate investing in Canada is to purchase a residential property and rent it out. Owning residential property allows you to earn an income from your investment through rental payments from your tenants.

The income you earn can go towards paying off the mortgage on the property and adding more cash flow for you to use.

Remember that owning residential real estate can be hard work. It is an active investment, and you will need to be involved in the affairs of your property with a more hands-on approach. Most people tend to manage residential rental properties themselves.

If you do not want to play the role of an active landlord, you can hire a property manager to deal with the tenants, look after the property for you, and ensure you get the rent on time.

Try to have your residential rental property produce enough cash flow so that you have enough left over after paying the expense of hiring a property manager.

Residential rental income can be a source of substantial income for real estate investors. According to the Global Property Guide, you can earn a gross rental return of around 3%-5% in Canada.

4. Commercial Rental Income

Commercial Rental Income

Commercial rental income is an uncommon method for individual investors to generate income through real estate investing in Canada. Commercial properties can include anything from office buildings to shopping malls and everything in between.

Commercial real estate properties allow businesses to operate on the property to generate income. Property owners can earn significant income through the rent from their tenants.

The earning potential for commercial property is immense, and it comes with some significant benefits, such as:

  • Higher returns than residential property
  • Qualified tenants that are more likely to follow the rules
  • Longer lease terms

For example, a 2,200-square-foot office space in Toronto could potentially have a quoted rent of $81,510 per year. That is almost $6,800 per month in rental income. You can check out more examples of commercial real estate listings here.

Of course, you need to consider that commercial real estate is also an active investment. You need to be hands-on with managing the property and dealing with tenants.

Depending on the type of commercial property you own, the intricacies of handling the management of the property can also drastically differ.

Between the exorbitant upfront capital needed to purchase commercial rental property and the complexities of managing it, most people won’t have the means to purchase commercial property directly.

A more realistic way to capitalize on commercial real estate income is through REITs or REIT ETFs. I’ll discuss both below so you can get a better idea.

5. Flipping Properties

Flipping Properties

Flipping properties, if done right, can help you make substantial profits.

The idea behind flipping properties is that you buy a property that needs to have some work done on it. The property needs to have significant potential to increase in value if you renovate it.

If you can find a residential property that needs fixing up and renovated it quickly, you can sell it for a handsome profit. While it may seem like a straightforward deal to buy houses, fix them up, and sell them for a profit, house flipping does not always pay off.

You can run into a wide range of issues. You must know what you are getting into before you decide to go with this strategy. Buying just any property because it needs fixing up does not work.

To increase your success in property flipping, you need to look for a property that requires some cosmetic upgrades but does not have major faults like a leaky basement or structural defects.

Before investing in any such property with the intent of flipping it, you should talk to a realtor and make sure you can resell the property for the amount you are looking for.

If the house fits the bill, you need to calculate the cost of renovations and compare it to the final price once it is ready to sell. If it gives you the opportunity to turn a significant profit, it is worth the investment.

6. Airbnb Your Property

Airbnb Your Property

You do not necessarily need to take a traditional approach when it comes to renting out residential property. Long-term rental websites like Airbnb allow you to rent out a space to help you earn some extra cash.

You do not even need to rent out an entire home to earn some money off of the Airbnb platform.

The short-term rental website allows you to rent a spare bedroom in your residence to earn extra cash.

You need to make sure that you consult any municipal bylaws and condo board rules, wherever applicable before you rent out your place on a short-term rental through Airbnb. There are increasing restrictions on Airbnb regulations.

For example, according to the Globe and Mail, Airbnb applied a limit to booking Airbnbs’ to young Canadians after an unfortunate incident in Toronto.

It is best to be entirely aware of any regulations to ensure you comply with all the laws.

You will also want to keep a close eye on your property since short-term tenants do not typically take good care of the property as much as long-term tenants usually do.

7. Land Rental Income

Land Rental Income

You can even use vacant land to earn a rental income. If you own vacant land, you can rent it out to any interested parties who may want to use the land for a variety of reasons. The most common source of land rental income is through renting it out to farmers.

As farmland tenants, they will pay you the rent monthly or annually. You should know that if you earn rental income from vacant land, you may be liable to pay taxes on the revenue.

Owning vacant land and using it for rental purposes can be beneficial for you even when you have no active tenants.

If you are not earning rental income from the vacant land, the CRA will consider your costs for maintaining the property as capital expenditures. It means that your expenses for maintaining the land can be added to the original cost of the property on sale.

The cost of the property is higher due to that amount if you are selling the vacant land. For more detailed information on taxes for vacant land, you can read the information on CRA’s website here.

8. REIT Stocks

REIT Stocks

Real Estate Investment Trust (REIT) stocks are a fantastic method for you to capitalize on real estate investing in Canada. REITs are companies that own and operate income-generating properties.

A REIT can own a large portfolio of properties, including commercial properties, offices, apartments, hospitals, shopping centres, and even residential properties.

You can buy and sell shares of publicly-traded REITs listed on the stock exchange through a broker.

Buying shares of a REIT offers exposure to the real estate market without the hassle of a hands-on approach, makes the real estate more accessible, and provides you with a significant payout through dividends.

Investing in a REIT with a track record for stable prices and a history of reliably disbursing payouts to its shareholders is ideal.

The REIT industry has been around for more than 25 years. From five REITs in Canada in 1996, there are almost 40 REITs trading on the Toronto Stock Exchange. The industry is increasing in popularity due to the ease REITs provide Canadian investors interested in the real estate sector.

You can buy Canadian REITs for free with Wealthsimple Trade, which doesn’t charge any trading fees.



When you invest in individual REITs, as in the previous example, you are relying on the performance of a single company to grow your capital.

It can leave your investment at risk of losses if the REIT suffers or declines in the stock market.

REIT ETFs allow you to invest in a diversified portfolio of REITs. It is a passive investment that consists of shares of the top Canadian REITs. You do not need to go through the hassle of choosing a specific REIT.

Owning an ETF automatically gives you diversification over several types of real estate properties like residential properties, retail, office, apartments, industrials, and much more.

Diversification in your investment portfolio could result in lower capital risk. It is an option that more conservative investors can consider or those who don’t want the hassle of choosing their own stocks.

My favourite ways to buy REIT ETFs in Canada are:

ImageProduct TitleFeaturesPrice
Editor's Choice
Wealthsimple Trade

Wealthsimple Trade

  • ETF buys and sells have $0 trading fees
  • Desktop and mobile trading
  • Reputable Brand
  • Beautiful Design
Get $25 Signup Bonus
Reliable Pick


  • ETF buys have $0 trading fees
  • Desktop and mobile trading
  • Most types of accounts available
Get $50 Free Stock Trades

Related Reading: Best REIT ETFs in Canada – This goes over whether or not the MERs are worth it

10. Pre-Sale Condo Assignments

Pre-Sale Condo Assignments

A pre-sale assignment is when you, as the property buyer, decide to sell your rights to the new property to another buyer before the building is complete. Since there isn’t a complete building to sell yet, the regulations for pre-sale assignments are a bit different than you’d expect when selling a completed home.

If you have good credit and are eligible for a mortgage on a brand-new condominium, then investing in pre-sale condo assignments can be a great way to earn some quick cash.

Since the construction of the condo is not yet complete, you’re technically not selling them a home. You’re just assigning the rights that you would have to the home once construction is complete.

One of the benefits of this process is that you typically don’t need to go through a home appraisal process. Your assignee will pay a fair price (typically right around market value) for the condo, trusting that it will be completed and well-built.

Pre-sale condo assignments tend to be more popular in markets that have experienced rapid growth (such as Vancouver or Toronto).

Example: let’s say that you paid the developer $250,000 for the new condo. Halfway through construction, you learn that the upcoming property may be valued at $265,000. At this point, you can assign the rights to the new condo to another buyer, and make a $15,000 profit with limited work on your part.

The one thing to keep in mind with pre-sale condo assignments is that some developers may charge a fee for this or request a percentage of your profit from the sale.

11. Real Estate Wholesaling In Canada

Real Estate Wholesaling In Canada

Real estate wholesaling can be an incredibly profitable venture for Canadian real estate investors. Here’s a quick run-down on how the process works:

  1. First, you find an individual who’s looking to sell their home (or property) for cash.
  2. Then, you communicate with the seller and explain that you can find them a cash buyer.
  3. If the seller is in favour of the idea, you’ll want to get the property appraised. This gives you the data you need to offer them a fair price while still keeping your own margins positive.
  4. You get the homeowner to sign a contract, allowing you a specified amount of time (usually 60 days or less) to find a buyer. During this time, the homeowner cannot sell the property to anybody else or work out another deal behind your back.
  5. With the contract signed, you’ll need to find a real estate investor who’s willing to buy the property in cash. These buyers are typically house flippers or those who are looking to purchase a rental property for themselves. Often, they don’t have time to go out and make deals, so they’re willing to pay a premium price for the right property.
  6. Once the investor is contracted and on board, the money will be held in an escrow account.
  7. The homeowner will be given the amount agreed upon in the contract, the home will be sold to the investor, and you’ll get to keep the difference.

Real estate wholesaling can be a quick way to earn thousands of dollars for a bit of networking. For instance, let’s say that you find somebody who wants to sell their home for cash. Their home may be appraised at $200,000, but they will take $180,000 from a cash buyer to sell it quicker.

These tend to be distressed buyers. These individuals tend to be recently divorced, ageing, or need to downsize quickly for other reasons. They’re usually willing to accept a slightly lower offer for their home if it means they get paid in cash.

The main advantage of real estate wholesaling is that you don’t have to invest any of your own money. The only out-of-pocket expenses you’ll have to pay are for the home appraisal and any document fees (if you’re working with a lawyer to create the contract).

The main disadvantage and risk of real estate wholesaling are if you can’t find an investor willing to take the deal in the contracted amount of time.

Note that Canadian regulations require real estate wholesalers to be licensed.

12. Offering Private Mortgages

Offering Private Mortgages

A private mortgage involves loaning your money to a home buyer so that they can purchase a home. This can be a great way to earn passive income and put your money to work for you.

So, why would somebody come to you for a loan instead of reaching out to a bank?

The biggest reason for somebody to seek out a private mortgage is that a larger bank or financial institution may have denied them. Perhaps their credit wasn’t good enough; maybe they couldn’t prove where their income comes from, or some other reason.

At this point, it’s a good idea to mention that private mortgages are often high-risk deals (or, at least, can be).

If the applicant has already been turned down by major banks, it’s often because they’re viewed as a high-risk applicant. They may have defaulted on loans in the past or may have a poor payment history.

Of course, the upside of this is that you can charge a higher interest rate than the bank. Simply put, you’re usually going to be the applicant’s last option. They’ve likely already been turned down by other banks that offer lower interest rates. You can use this as leverage to land a better deal.

Unlike traditional bank-back loans, you can also set your own loan repayment terms. For instance, you could set a five or ten-year repayment term instead of the typical twenty or thirty-year mortgage terms offered by big banks.

Private mortgages definitely aren’t a beginner’s strategy. For one, they require you to have a significant amount of capital to lend out to a homebuyer. Secondly, you’re going to encounter riskier applicants.

However, if you have experience as a private lender, and commit to doing your due diligence with each applicant, then it can be a profitable way to invest in real estate and earn passive income.

Real Estate Investing Vs. Stocks

A common thing that people ask is whether they should consider investing in the stock market or the real estate market to gain more substantial returns.

The Canadian real estate market is a booming industry. However, the Toronto Stock Exchange is another phenomenal place to park your capital for terrific returns.

According to this real estate agent, even he admits that Canadian stocks have averaged an increase of 6.0% per year compared to a 4% increase per year in Canadian real estate values in the past 25 years. It may seem like stocks are a better investment than real estate.

But his argument is that you can use leverage for outsized gains. If you invest $100,000 in stocks, you get exactly $100,000 worth of stocks. If you invest the same $100,000 in real estate with 75% financing, you can buy $400,000 worth of real estate properties.

According to the 6% per year average for stocks, $100,000 in the stock market can grow to around $405,000 after 25 years. The same $100,000 down payment invested in $400,000 real estate can grow in value to over $1,000,000 after 25 years, assuming a return of 4%. This is more than double the returns if you invest in real estate.

But be aware that this is a double-edged sword. You are buying something on leverage, so if you lose money on your property value, your losses will hurt that much more. Albertans have experienced this problem in recent years.

Real estate could offer you more significant long-term stability and returns than the stock market if you can borrow at a low-interest rate. It is a tangible asset that will likely never go to zero.

There will always be a use for real estate, and the only way you can lose money on your investment in the sector is by selling in a down market.

There’s room for both real estate and stocks in your portfolio. I own property, stocks and ETFs as part of my diversification strategy. The downsides of real estate are it is time-intensive and can involve lots of research and planning. But the rewards can be well worth it.

What Are Some Advantages of Real Estate Investing In Canada?

Real estate investment is one of the best ways to earn money in the long term. There’s a reason why 90% of all millionaires worldwide have invested in real estate deals in one form or another.

Here are some of the key advantages of investing in real estate as a Canadian.

1) Your Money Works For You

Your money does very little good sitting in a bank. If you’re lucky, you may earn a fraction of a percentage in annual interest. When you invest in real estate, though, you’re allowing your money to work for you so that you can earn passive income from your investments.

Whether you’re investing in a condo to rent out, an Airbnb property, or flipping a home, all of these investments present the opportunity to win big on your investment.

2) Real Estate Can Be A Hedge Against Inflation

The nice thing about property is that its value fluctuates to accommodate for inflation. For instance, if you own a property, you can increase the amount of rent your tenants pay to adjust for inflation. The same can also be said for long-term holding investments.

3) Potential Tax Breaks

As a property owner, you’ll be eligible for more tax breaks than the average part-time investor or full-time employee. Expenses such as property taxes, building repairs, and even the interest on your mortgage are all potential tax write-offs.

4) Diversifies Your Investment Portfolio

As the saying goes, you should never put all of your eggs in one basket. Markets can fluctuate dramatically and not always in your favour. Investing in real estate is a great way to diversify your portfolio and protect yourself from sudden market changes.

Potential Risks When Investing In Canadian Real Estate

Real estate investing certainly has its advantages. However, even the best investments can be risky. Here are some of the potential risks that Canadian real estate investors should be aware of.

1) Research Can Be Time-Consuming

If you want to be a successful real estate investor, then you’ll need to do a lot of research. You should never go into any investment or deal blind. You’ll want to have accurate data about the property location, the value of the property, and a solid plan for turning the property into an income-producing asset.

2) Vacancy & Rentals

Almost every rental property is going to be vacant at certain times. This is especially true in regard to vacation rentals. When performing your research and crunching numbers, you’ll need to account for the fact that there will be some weeks (or even months) when your property is empty and it’s not earning income.

Uncontrollable forces of nature (such as a pandemic, fuel costs, natural disasters, etc.) can also contribute to increased vacancy during a given year. For instance, many Airbnb rentals had to take out business loans to make it through the 2020 pandemic and keep up with their property expenses.

3) Mistakes Can Be Very Costly

Even the best researchers can make mistakes. I’ve met investors who fail to account for important details, such as a poor building foundation, that cost them a lot of money on the back end to repair.

These mistakes can be very costly, cut into your profits, and may even result in you losing money. Meticulous research is the best way to hedge against this risk. If you don’t know much about real estate, then you’ll definitely want to work with a reliable appraisal specialist.

4) Buying Property Requires Money Upfront

If you plan on buying property, then you’re going to need some money upfront. Even if you’re mortgaging the property, most lenders require anywhere from 5% to 20% as a down payment. Your down payment amount will vary depending on the type of property, your personal credit, collateral, and other factors.

5) Housing Market Crashes

Housing market crashes are unavoidable, and it can often be hard to tell exactly when the market will crash. If you’re unlucky enough to invest in a property right before a major crash or market downturn, then you could end up losing money (especially if you purchased the property as a short-term flip).

How Does Real Estate Investing Affect Taxes In Canada?

Here are the three main taxes you need to be aware of:

  • Capital Gains Tax: Whenever you sell a property for a profit, the Canadian government will expect you to pay capital gains taxes. The same applies to selling real estate stocks and wholesaling homes.
  • Rental Income Tax: On all the revenue earned from your properties
  • Property Taxes: This varies, depending on the province and city the property is located in, the value of the property itself, and its size.

Final Thoughts

When it comes to investing, I think it should never be an “either/or” approach. Diversity always works better in terms of getting decent returns and protecting your capital.

Investing money in the stock market can be fantastic, but you should also consider investing in the real estate market.

There is a reason why it is one of the most popular asset classes for Canadians to invest in: people like to invest in things they can touch and see.

Stocks can be a bit of an abstract concept for many people. There is an emotional connection to buying real estate that can develop that you don’t get by just buying stocks in a company!

I hope this article helped you understand the different investing methods in Canada’s real estate market.

If you want other options for investing, read my guide on how to start investing in Canada here.

Photo of author
Author Bio - Christopher Liew is a CFA Charterholder with 11 years of finance experience and the creator of Wealthawesome.com. Read about how he quit his 6-figure salary career to travel the world here.

Check Out These Posts:

7 thoughts on “12 Best Real Estate Investing In Canada Options (2024)”

  1. Investing in the Canadian real estate market is undoubtedly one of the finest investments you can carry out. Such investments, without doubt, can go a long way, trust me on that.

  2. I appreciate that you have provided clear information regarding real estate investing in Canada for 2022. This is impressive and makes it simple for people to read. Thanks for taking the time to elaborate that point of view.

  3. It is fantastic that Many Canadians no longer consider real estate as only something they can live in. This shows that the mindset of people living in Canada is thinking of real estate as an investment.

  4. Key reason to invest in residential real estate are:
    Expenses, including interest on your borrowings, are tax deductible.
    You make money as the value of the property increases.
    You can leverage your investment.
    You get rental income.


Leave a Comment