The recent surge in interest surrounding fourplex construction in Toronto can be attributed to a combination of favourable factors. One pivotal development is the recent overhaul of zoning regulations, enacted in 2023, which now permits every residential property in the city to accommodate up to four units, alongside the possibility of adding a backyard house.

A significant catalyst for this trend is the removal of parking requirements, a move that liberates valuable space on properties, particularly beneficial for smaller lots in Toronto. This adjustment has effectively facilitated the realization of four-unit structures within the city's spatial constraints.

Moreover, the cost-effectiveness of constructing fourplexes has improved markedly. Previously, developers contended with substantial development charges, averaging around $50,000 per unit. However, under the revised regulations, these fees are waived for up to four units, substantially reducing the financial burden associated with construction. Additionally, if the backyard house constitutes the fifth unit, its development charge can be deferred for a period of 20 years.

Another compelling incentive driving interest in new builds is the exemption from rent control for these units. As Toronto grapples with a housing crisis, market rents are escalating rapidly. Non-rent controlled units offer investors and potential tenants greater flexibility and potential for higher returns, especially as the disparity between existing rents and market rates widens.

In summary, the confluence of zoning changes, relaxation of parking requirements, waived development charges, and the absence of rent control on new units has spurred a resurgence in fourplex construction, making it an increasingly appealing prospect.

Navigating Financing Options for Income Properties in Toronto

Investing in income properties in Toronto can be a lucrative venture, but understanding your financing options is crucial to success. We'll explore various financing avenues for investors interested in purchasing income properties in the vibrant Toronto real estate market.

Traditional Mortgages:

One of the most common financing options for income properties is a traditional mortgage. Investors can secure a mortgage from banks, credit unions, or mortgage lenders to finance the purchase of a rental property. With a traditional mortgage, investors typically make a down payment of 20% or more and repay the loan plus interest over a fixed term, usually 15 to 30 years. While traditional mortgages offer competitive interest rates and predictable monthly payments, they often require a strong credit history and proof of steady income.

Alternative Financing Options:

In addition to traditional mortgages, investors can explore alternative financing options to fund their income property investments. These may include:

• Private Lenders: Private lenders offer financing solutions outside of traditional banking institutions. They may be more flexible in their lending criteria and offer faster approval processes, making them suitable for investors who may not qualify for a traditional mortgage.

• Hard Money Loans: Hard money loans are short-term, high-interest loans secured by the value of the property. They are often used by investors who need quick financing for renovation projects or property flips but may not qualify for traditional financing due to credit issues or lack of income documentation.

• Seller Financing: In seller financing arrangements, the property seller acts as the lender and provides financing to the buyer. This can be advantageous for investors who are unable to secure traditional financing or wish to negotiate more favourable terms with the seller.

Strategies for Leveraging Equity:

Another financing strategy for income property investors is leveraging equity in existing properties to fund new acquisitions. This can be accomplished through:

• Home Equity Loans or Lines of Credit (HELOCs): Homeowners can tap into the equity built up in their primary residence by taking out a home equity loan or line of credit. These funds can then be used as a down payment or to finance the purchase of an income property.

• Cash-Out Refinancing: Investors with existing mortgages on their properties can refinance their loans and take out additional cash beyond the amount needed to pay off the existing mortgage. The cash-out proceeds can be used for investment purposes, such as purchasing income properties or funding renovations.

Conclusion:

Navigating financing options for income properties in Toronto requires careful consideration of your financial situation, investment goals, and risk tolerance. Whether you opt for a traditional mortgage, explore alternative financing options, or leverage equity in existing properties, you must conduct thorough research and consult with financial professionals to determine the best financing strategy for your investment objectives. Understanding your financing options and leveraging the right resources can unlock the potential of income property investing in the dynamic Toronto real estate market.

As Toronto's real estate market continues to evolve, so do the regulations that govern it. Recent changes in government policies and local regulations have had a significant impact on real estate investors and property owners in the city. In this blog post, we'll explore the most recent regulatory changes affecting Toronto's real estate landscape and provide insights into how investors can adapt to these changes.

Extended Rent Control Measures:

• The Ontario government recently extended rent control measures to include all private rental units in the province. This change means that landlords are now limited in the amount they can increase rents annually for existing tenants. While this provides stability for renters, it may impact the profitability of income properties for landlords.

Foreign Buyer Taxes and Restrictions:

• In an effort to address housing affordability concerns, the government has implemented measures such as the Non-Resident Speculation Tax (NRST) on foreign homebuyers in the Greater Golden Horseshoe area, including Toronto. These taxes and restrictions aim to deter speculative investment and stabilize the housing market.

Impact of Mortgage Stress Test Rules:

• The federal government's mortgage stress test rules require borrowers to qualify for a mortgage at a higher interest rate than the actual mortgage rate they will pay. This measure aims to ensure borrowers can afford their mortgage payments if interest rates rise. However, it has made it more challenging for some buyers to qualify for mortgages, affecting demand in the real estate market.

Zoning and Development Regulations:

• Municipal governments in Toronto continue to implement zoning and development regulations to manage growth, density, and urban planning initiatives. These regulations can impact the types of properties that can be developed, their intended uses, and the density of residential neighbourhoods.

Changes to Land Transfer Taxes:

• The City of Toronto has its own municipal land transfer tax, in addition to the provincial land transfer tax. Changes to land transfer tax rates or thresholds can affect the cost of buying and selling real estate in Toronto, impacting both buyers and sellers.

Conclusion:

Navigating Toronto's shifting real estate regulations requires staying informed about recent changes and understanding their implications for investors and property owners. By staying updated on government policies, consulting legal experts, and seeking professional advice, investors can adapt their strategies to navigate the evolving regulatory landscape and continue to thrive in Toronto's dynamic real estate market.

The smartest investors aren't always chasing numbers, they're not chasing a dream, they're investing with logical research and ample due diligence. Too many investors these days speak like an infomercial. They've attended too many seminars and read too many books. It's not all about the numbers. You need to be creative, shake the tree a bit and do the dirty work. Number chasers typically run away from Toronto chasing superior returns outside the core without applying the proper consideration to factors such as appreciation and quality of life. It's about where the real upside is about identifying which micro-pockets are undervalued. History repeats itself and the same patterns continually occur. Historically, the most affordable areas are the least gentrified and are closest to the core tend to appreciate at the highest rate. So you ask, where's the next pocket to be on the lookout for? To hit that proverbial tipping point we must ask the hipsters because once they descend, values start to rise.

I’ve identified 5 key areas that I feel will represent superior investment opportunities and ensure better returns.

Silverthorne

Firstly, I would look towards the Silverthorne area. 

Location: Flanked by railroad tracks marked by Eglinton to the north, the railroad tracks west of Caledonia to the east Rogers Road to the South the Union Pearson Express rail line to the West also called Hillsdale / Eglinton. 

Silverthorne is an area of significant transition. A new transit hub at the Kodak is being built and a new land revitalization project is being constructed in the York recreation center. This project offers exciting community amenities. There is tremendous upside for first-time buyers and builders alike. As new buyers get driven farther from the core, this location makes obvious sense. Soon the end of the construction of the crosstown Subway in Eglinton will be a significant boon for the area. We see the first signs of a hipster invasion as millennials get priced out of other areas we are starting to see trendy coffee shops and restaurants starting to open up. The quick access to the burgeoning Stockyards district with its plethora of brewpubs is also a great help. The existing housing stock of homes has many detached homes, so we are starting to see builders building knock-down rebuilds. The commercial strip along Rogers Road is quickly gentrifying and the industrial lands along the railyards will be ideal infill development opportunities.

Greenwood Coxwell

On the east side, I see tremendous potential in the Greenwood Coxwell area, sometimes referred to as Little India. Stretching from the Danforth to Queen and Greenwood to Coxwell and the area is in a unique transition. We have already started to see a renaissance along Gerrard with ample gentrification and now that is moving further east along Gerrard. Smack dab between the beaches and Riverdale and all but barren until fairly recently we are seeing an explosion in Little India of cool new restaurants, cafés, brew pubs and art galleries driving development. Hopefully, the area will be able to maintain a stronghold of its roots and the South Asian restaurants and shops will be able to co-exist. Sandwiched by quality parks on one side is Greenwood Park with its updated facilities, including a pool/skating rink and dog park and the popular Monarch Park with a large pool, playground and community events amenities, and Woodbine Park and Beach chock-full of amenities and events. This pocket is close enough yet far enough away from the eventual Ontario Subway relief line at Gerrard and Pape. The proximity to Woodbine Beach and the abundance of parks add to the draw.

  The housing stock in general is slightly more affordable than its neighbouring pockets and offers solid opportunities for infill development and small investor properties set up as duplexes and triplexes. The most intriguing opportunity is the commercial stretch along Gerrard where land assembly and redevelopment of the existing buildings is ideal. There is a significant stock of underutilized 1 and 2-story buildings ripe to be repurposed as the gentrification proceeds.

Oakwood-Vaughan

Another zone to consider is the Oakwood-Vaughan zone, Oakwood-Vaughan is named for the neighbourhood’s central intersection and is bordered by Eglinton to the North, Winnett and Arlington to the east, St. Clair to the South, Dufferin to the West transitioning at a fast pace.

Commonly known as OV or Oakwood Village, is a classic multicultural Toronto neighbourhood in transition.

Drivers heading out of the city find easy access via Allen Road just north of Oakwood-Vaughan. The key attribute is its proximity to the core being only about 6 kilometres from the financial district and the construction of the Eglinton Crosstown Light Rail Transit which has caused years of retail suffering and traffic chaos. Its impending completion will undoubtedly help the community prosper.

The annual Oakwood Village Arts Festival and the Oakwood Village Library and Arts Centre promote a burgeoning art community. Arts-focused community-based facilities (Arts Starts and the Oakwood Village Library and Arts Centre) call the neighbourhood home. Make no mistake, the strong artistic presence is a statement about affordability here, although it is a neighbourhood in transition: The large number of affordable detached homes has caught the notice of infill builders and we are seeing an ever-increasing number of knockdown rebuilds. Tenants appreciate the ease of access and more reasonable rental rates for the time being. The most significant event to help drive development has been the advent of two private schools, the Lycée Français de Toronto and the Leo Baek Day School which have driven a demographic change. The City of Toronto recently allowed increases for building intensification and coverage in helping to spur development, including Live Work use.

Don Mills

This sprawling affluent Toronto neighbourhood stretches from York Mills in the north to Eglinton Avenue East in the south. The eastern boundary is marked by the Don Valley Parkway. The western edge of the neighbourhood runs down Leslie from the 401 to York Mills and down Bayview from York Mills to The Bridle Path. What was once North America's first planned community Don Mills is starting to transform again. Most notable amenities include the Ontario Science Centre, Aga Khan Museum and right in the middle of some of the best urban ravine and park infrastructure between the Don River and Sunnybrook Park, Edwards Gardens and 2 Golf Courses. Adjacent to one of the premier Health Facilities Sunnybrook Hospital and a top Private School. The massive redevelopment at Don Mills and Lawrence, once an Indoor Mall and now transformed into a community hub, The Shops at Don Mills are witnessing an influx of condos being built on the site.

 The construction of the Eglinton Crosstown and the likely-to-be-built Ontario line (part of the relief line) with an Ontario Science Centre stop will be pivotal in encouraging further developments. The sizable commercial/industrial sectors lend themselves to significant repurposing, including the massive 60-acre site at the old IBM facility slated for mixed-use with 10,000 residents.

 The existing housing stock consists of an abundance of older 1950 and 1960s-era detached homes on large lots, ensuring a sizable number of quality infill opportunities. Already we are starting to see a significant number of knockdown rebuilds throughout the zone. There are several older mid-rise rentals which would lend themselves to further coverage along with ample industrial lands for residential opportunities.