Investing in Toronto rentals: the numbers
Toronto is the hardest market in the country to cash-flow and the easiest to overpay in. Prices are high, cap rates are thin, and many buyers here are paying for appreciation, not monthly income. That makes accurate math more important, not less. Here are the numbers.
Toronto at a glance
| Average 2-bedroom rent | $2,034/mo (CMHC Rental Market Report, October 2025) |
|---|---|
| Average 1-bedroom rent | $1,711/mo (CMHC Rental Market Report, October 2025) |
| Rent growth, year over year | 3.5% (CMHC Rental Market Report, October 2025) |
| Rental vacancy rate | 2.8% (CMHC Rental Market Survey, October 2024) |
| Typical multi-family cap-rate band | 3.5 to 5.5% (CBRE / Colliers Canada cap-rate surveys, 2024-2025) |
| City residential mill rate | 5.91 per $1,000 of assessed value, 2024 (municipal tax bylaws, 2024) |
| Rent control | 2.5% 2025 guideline on most pre-nov 2018 units |
Figures from CMHC, CBRE and Colliers Canada surveys and municipal tax bylaws. Cited with each row above. Rents are existing-tenant averages; new leases on turnover usually run higher.
A Toronto fourplex, run in full
Take a small four-unit building in Toronto. Using the CMHC Rental Market Report, October 2025 average two-bedroom rent of $2,034 a month across the four units, gross rent comes to about $8,136 a month, or $97,632 a year. At a purchase price near $1,302,000, the math looks like this.
Property tax at Toronto's residential mill rate of 5.91 per $1,000 runs about $7,695 a year. Add roughly $27,300 for insurance, maintenance, management, and a vacancy reserve, and total operating expenses land near $34,995. That leaves a net operating income around $62,637 a year. That works out to a cap rate near 4.8%, in line with the 3.5 to 5.5% band that CBRE and Colliers Canada cap-rate surveys (2024 to 2025) report for Toronto multi-family.
Now add the mortgage. With 20% down on a 30-year amortisation at current rates, the debt service is the line that decides whether this deal cash-flows. If it qualifies for CMHC MLI Select, a 1.10 DSCR threshold and a 40-year amortisation path change the math in your favour. That is the kind of difference a US-built tool misses, because it does not carry the CMHC paths at all. The numbers only hold if the rents, the unit count, and the mill rate are real, not what the listing claims.
What is specific to Toronto
- Toronto's residential mill rate is among the lowest in Ontario, but high assessed values mean the dollar tax bill is still large.
- Buyers in Toronto pay a municipal land transfer tax on top of the provincial one. Count both in your closing costs.
- Cap rates here are thin by national standards. A deal that looks fine on price can hand you a weak or negative cash-on-cash return once a Toronto mortgage is on it.
Run a real Toronto listing through BrickROI.
Paste the realtor.ca URL and the Canadian property data fills in the price, taxes, and rent comps. You get cap rate, DSCR, cash-on-cash, the CMHC and MLI Select paths, and a lender-ready PDF in two minutes.
Try a dealWant to run the numbers yourself first? Start the cash-on-cash calculator with this example's figures.
Toronto investor questions
Is Toronto a good place to invest in rentals?
It depends on the specific deal. Toronto has an average two-bedroom rent of $2,034 a month and a rental vacancy rate of 2.8% per the CMHC Rental Market Survey, October 2024. Run the actual numbers on the building before you decide.
What is the average cap rate in Toronto?
CBRE and Colliers Canada cap-rate surveys (2024 to 2025) put Toronto multi-family in roughly a 3.5 to 5.5% band. Verify against the actual rents and the city mill rate, because a specific building can land outside that range.
What is the average rent in Toronto?
Per the CMHC Rental Market Report, October 2025, the average two-bedroom rent in Toronto is $2,034 a month and the average one-bedroom is $1,711. Rents grew about 3.5% year over year. New leases on turnover typically run higher than these existing-tenant averages.
Does rent control apply in Toronto?
Ontario caps annual rent increases for most units first occupied before November 15, 2018. The 2025 guideline is 2.5%. Units first occupied on or after that date are exempt from the cap.