How to Start Investing in Real Estate in Canada in 2025

Investing in real estate in Canada in 2025 remains one of the most compelling ways to build wealth. Whether you're aiming for steady rental income or long-term appreciation, this guide lays out a roadmap that’s better than most top ranked resources.

1. Why Real Estate Still Works in Canada (2025)

• Consistent appreciation: major markets like Toronto, Hamilton, and Vancouver deliver ~7–10% annual returns over the past decade.

• Rental demand remains strong due to immigration, constrained housing supply, and affordability pressures.

• Leverage enhances returns: financing 80% of a purchase lets you maximize buying power, though it carries risks.

  
  

2. Choose Your Investment Strategy

1) REITs, ETFs & MICs (low capital, passive)

• Minimum investment thresholds as low as $1,000 or even $100 for REITs or crowdfunding platforms.

• MICs offer 6–12% yields and are TFSA/RRSP eligible under Income Tax Act rules

  
  

2) Rental Properties (hands‑on, medium capital)

• Conventional investments: condos, duplexes, townhouses, or multi‑unit properties.

• Requires mortgage financing: typically 20% down for non‑owner‑occupied properties; owner‑occupant units may need as low as 5% with multiple units.

  
  

3) Flips & Renovation Projects (active, higher risk/reward)

• Buy undervalued properties, renovate, and flip for profits

• Ideal for experienced investors or those partnering with contractors

  
  

3. Step‑by‑Step Roadmap

1. Define your goals – Are you looking for passive income, long‑term growth, or capital gains?

2. Educate yourself – Understand regional rental rules, financing options, renovation costs, and taxation laws like mortgage interest deductibility for investment properties

3. Assess financing & down payment – Conventional lenders often require 20% down for investment properties. Shorter options or shared purchases may allow lower down payments.

4. Select your strategy – REIT/MIC for easy entry; rentals for ongoing income; flipping for accelerated returns.

5. Build your team – Engage a mortgage broker familiar with rental deals, a know‑your‑market real estate agent, accountant, contractor and property manager if needed.

6. Run numbers & manage risks – Account for vacancy rates, maintenance, interest rate increases, and cash buffer needs.

7. Execute and scale – Start conservatively, then scale by recycling equity and repeating the strategy or diversifying across REITs, rentals, and markets.

   
   

4. Top Markets to Watch in Canada (2025)

1. Halifax, NS – average home price around $550K, projected +9% annual growth thanks to growing immigration and tech sector.

2. London, ON – affordable entry (~$675K), rising jobs in education/healthcare, strong student rental demand (~8% growth forecast).

3. Saskatoon, SK – houses around $475K, diversified economy, rising demand and ~8.5% projected growth.

4. Hamilton & Milton, ON – infrastructure growth, proximity to Toronto, affordability, strong rental yields and population expansion.

5. Kitchener‑Waterloo / Guelph – tech hubs, universities, population growth; strong rental markets and redevelopment potential.

   
   

Final Summary

Canadian real estate in 2025 remains a strong vehicle for wealth building—whether through REITs, rentals, or renovations. Starting small is fine: passive investments let you get your feet wet; rental properties offer steady income and appreciation; flipping suits those seeking higher returns (and risk). By choosing the right market—Halifax, London, Saskatoon, Hamilton/Milton, or Kitchener‑Waterloo—you align affordability with growth. Always plan carefully, build a reliable team, and scale thoughtfully.

Frequently Asked Questions

Is real estate still a good investment in Canada?

Yes—despite rising interest rates, long-term appreciation remains strong (~7–10% historically), rental demand is robust, and real estate serves as an inflation hedge and reliable wealth-builder.

Do you need 20% down for an investment property in Canada?

Usually yes for non-owner-occupied purchases. However, some strategies like joint ownership or multi-unit owner-occupied properties may allow as low as 5–10% down.

Can I invest $5,000 in real estate?

Definitely—through publicly traded REITs, crowdfunding platforms, or MICs, you can begin investing with $1,000–$5,000 without direct property ownership.