How to Cash Flow in Toronto Real Estate

Everyone says you can’t make money investing in Toronto real estate. The prices are too high. The properties don’t cash flow. You’d be crazy to try.

But what if that’s completely wrong?

Ming Lim, president of Volition Properties, has built his entire business around proving Toronto can work for investors. Not only that—he argues Toronto is actually less risky than cheaper markets.

Why Most Real Estate Investors Burn Out

Ming started investing at 21, right after university. Like many people, he read Rich Dad Poor Dad and got hooked on the idea of passive income.

He bought 21 properties in Waterloo. And he hated every minute of it.

His evenings and weekends disappeared into property maintenance. He’d drag whoever he was dating to help paint rooms and fix broken doors. It was exhausting, unsustainable, and nothing like the passive income dream he’d signed up for.

After years of this, Ming wanted out completely. But before quitting, he made one smart decision: someone must have figured out how to do this properly.

The Networking That Changed Everything

Ming searched meetup.com for every real estate investment group within a two-hour drive. He attended every single one. He met as many experienced investors as possible.

Through this process, he had a huge realization: he wasn’t being strategic. His method was way too simple—if a property cash flowed on paper, he’d buy it. He wasn’t thinking about scale, operational efficiency, or building proper systems.

He met his now-business partner Matt during this networking phase. Together, they made a surprising choice: they consolidated their portfolios in Toronto.

Despite the higher purchase prices, they were getting better returns in Toronto. The business was more sustainable. They weren’t driving hours to deal with tenant problems. And they were making better money.

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The Three Principles That Make Toronto Work

Principle #1: Be an Expert in Your Market

Ming’s mother once called to say she was buying semiconductors. He asked what a semiconductor was. She didn’t know.

His response? “What business do you have investing in something you don’t understand?”

The same applies to real estate. If you don’t know the difference between High Park, Victoria Park, and Moss Park—and you think they’re all just parks—you shouldn’t invest in Toronto.

You need to understand neighborhoods at a street-by-street level. You need a team that can fill your knowledge gaps. You need to stay current with regulatory changes (like the recent garden suite angular plane rules that affect second-floor sizing).

Don’t chase opportunities in markets you don’t understand. Choose depth over breadth.

Principle #2: Put Risk Management First

Ming worked in finance after his stint at Research in Motion. In that world, nobody makes moves without extensive risk analysis—frameworks, SWOT analyses, multiple layers of due diligence.

But in real estate? People use napkin math. “Oh, it cash flows. Great. Buy.”

Ming did this himself early on—literally writing calculations on a napkin at a diner, doing five lines of basic math, and calling that due diligence.

That approach doesn’t work for long-term success.

Volition developed the TIME framework to assess every investment:

T – Tenant: Who will rent this property?
I – Investor: What are the client’s goals and situation?
M – Market: What’s happening in this specific area?
E – Estate: What’s the property condition and potential?

They don’t buy properties that cash flow on paper and hope to find good tenants. They identify where the best tenants live, then buy properties there.

Principle #3: Match Your Strategy to Your Market

You can’t take a strategy that works in Sarnia and expect it to work in Toronto.

Toronto is more sophisticated. It requires more sophisticated approaches. The tenant expectations, property types, and operational requirements are completely different.

Success means adapting your business model to match the market you’re in.

The Tenant-First Strategy That Changes Everything

Here’s how most investors operate:

Find a property that seems to Cash Flow
Buy it
Cross their fingers and hope for good tenants

Volition flips this completely:

Identify the ideal tenant profile
Find out where these tenants prefer to live
Buy properties in those specific locations
Design the offering to meet these tenants’ needs

Who Are These Ideal Tenants?

Volition targets young professionals, ages 25-35, earning $65,000-85,000 annually. They’ve graduated from university, they don’t own cars, and they commute to work or work hybrid.

They prefer neighborhoods like Little Italy, Little Portugal, and East York.

Here’s the key insight: 60-70% of this group lives in condos. But that means 30-40% actively choose not to.

Since COVID, this percentage has grown. People working from home don’t want to live in 400 square feet. They want outdoor space they can actually use. They want an extra bedroom for an office.

In condos, these features are hard to find at prices young professionals can afford. That’s the niche Volition fills.

Why Condos Are a Trap for New Investors

New investors love condos. They’re low maintenance, everything’s new, and they seem simple.

The problem shows up 2-3 years later when maintenance fees start climbing. The building needs a new roof. Major repairs are required. Your condo fees jump.

You have zero control over this. And if you have rent control, you can’t raise rent to match your increased expenses.

Ming has been anti-condo for six or seven years. There was only one project that made sense, and only because they got extraordinary pricing directly from the developer.

Think about it like this: why would you keep investing in a business where the bigger it got, the more money it lost? That’s exactly what happens when you scale a condo portfolio with negative cash flow.

Strategies That Actually Work in Toronto

The Duplex Strategy

For someone who needs a place to live and is considering a condo, Ming often recommends a duplex instead.

Here’s how it works:

Buy a duplex using favorable CMHC financing
Live in the basement unit yourself
Rent out the upstairs unit
Your monthly costs are less than owning a condo
You’re building Equity in a property with more potential

Yes, you’re living in a basement. But financially, you’re way ahead of where you’d be with a condo.

Financing Without High Income

You don’t need a massive income to invest in Toronto. There are two approval approaches:

Approach #1: Income-BasedThe lender looks at your employment income plus the rental income, factors in expenses, and approves based on debt ratios.

Approach #2: Property-BasedThis is more like commercial lending. If the property covers its own expenses and debt service, you can get maximum financing regardless of your personal income.

You could earn 25% of what a typical Toronto investor earns and still qualify using the right lenders and tools.

The Real Reason Toronto Prices Are High

Nobody looks at an expensive stock and dismisses it just because the price is high. With stocks, when something is cheaper, investors often get worried about risk.

Real estate works the same way. Toronto prices are high because the risk is lower. Properties in cheaper markets cost less partly because there’s more risk involved.

There are turnkey triplexes in Toronto right now that cash flow positively. People just assume nothing works because the market is expensive. That assumption is wrong when you know how to analyze properly.

Starting Your Toronto Investment Journey

Volition doesn’t just help people buy properties. They start with financial planning questions:

Why are you looking at real estate?
What are you trying to accomplish?
What are your short and long-term goals?
What’s your current financial situation?

Based on these answers, they develop a plan tailored to each person’s unique circumstances.

Their services range from turnkey triplexes that are already cash-flow positive, to duplexes with various strategies, to advanced development projects.

The key is this: Toronto isn’t too expensive to work. It just requires a different approach than cheaper markets. When you combine market expertise, proper risk management, and tenant-first thinking, Toronto can be one of the best places to build a real estate portfolio.

You just need to stop doing napkin math and start thinking strategically.

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Frequently Asked Questions

Can you really cash flow on Toronto rental properties?

Yes. Despite what most people think, there are properties in Toronto that cash flow positively right now, including turnkey triplexes. The key is knowing which neighborhoods to target, understanding tenant profiles, and using proper financing strategies. Toronto prices are high because risk is lower, not because returns don't exist.

What's the tenant-first investment strategy?

Instead of buying a property and hoping to find good tenants, you first identify your ideal tenant profile, then find out where those tenants prefer to live, and finally buy properties in those specific locations. This dramatically reduces tenant issues because you're targeting people whose lifestyle and income align with your property offering.

Why should new investors avoid Toronto condos?

Condo maintenance fees can increase dramatically after 2-3 years, and you have zero control over them. If the building needs major repairs, your fees go up but you can't raise rent to match (especially with rent control). This creates negative cash flow that gets worse over time. It's like investing in a business where the bigger it gets, the more money it loses.

What's the duplex strategy for Toronto investors?

Buy a duplex using CMHC financing, live in the basement unit yourself, and rent out the upstairs unit. Your monthly costs are actually less than owning a condo, plus you're building equity in a property with more upside potential. It requires some sacrifice, but financially you're way ahead.

Do I need high income to invest in Toronto real estate?

No. With property-based financing (commercial-style lending), lenders focus on whether the property covers its own expenses and debt service rather than your personal income. You could earn 25% of what a typical Toronto investor earns and still qualify using the right lenders and mortgage tools.

What neighborhoods work best for Toronto rental investments?

Areas like Little Italy, Little Portugal, and East York work well for young professional tenants (ages 25-35, earning $65,000-85,000). These tenants don't own cars, work hybrid or remote, and want outdoor space and extra rooms—things condos don't offer at affordable prices.

What's the TIME framework for Toronto real estate?

TIME stands for Tenant, Investor, Market, and Estate. It's a risk management framework that evaluates properties across four dimensions: who will rent it (Tenant), what the client's goals are (Investor), what's happening locally (Market), and the property's condition and potential (Estate). This ensures comprehensive risk assessment before buying.

Why is market expertise so important for Toronto investing?

Toronto requires street-by-street knowledge of neighborhoods, understanding of regulatory changes (like garden suite rules), and knowing how details impact returns. You can't invest successfully in something you don't understand. Being an expert in your specific market, or having a team that fills knowledge gaps, is essential for long-term success.

Disclaimer: LendCity Mortgages is a licensed mortgage brokerage, and our team includes experienced real estate investors. While we are qualified to provide mortgage-related guidance, the broader financial, tax, and legal information in this article is provided for educational purposes only and does not constitute financial planning, tax, or legal advice. For matters outside mortgage financing, we recommend consulting a Chartered Professional Accountant (CPA), licensed financial planner, or qualified legal advisor.

Written by

LendCity

Published

December 22, 2025

How to Cash Flow in Toronto Real Estate | Investor Guide