Ontario’s Single-Family Rentals Aren’t Working in 2025. Here’s What To Do Instead
If you’re considering a single-family rental in Ontario, the math is tough in 2025. Prices remain high, mortgage rates are elevated, and taxes, insurance, and maintenance are up. Rents improved, but not enough to cover carrying costs. Most scenarios produce negative monthly cash flow. Savvy investors are shifting to multifamily income where rent-to-price ratios and lender treatment are more favorable.
The numbers at a 5.09% rental rate Example: GTA freehold at $850,000, 20% down.
Mortgage amount: $680,000
Rate: 5.09% fixed
Amortization: 30 years
Monthly principal and interest: about $3,680
Property tax: $500–$650 per month
Insurance: $120–$160 per month
Maintenance reserve: ~1% of value per year, about $700 per month
Total carrying cost: about $5,000–$5,190 per month
Typical 3-bed rent: $3,400–$3,900 per month, depending on location and condition. Result: a shortfall of roughly $1,100–$1,600 before vacancy and unexpected repairs. Even with extended amortization or marginally better pricing, you need a legal secondary suite, a below-market purchase, or above-market rent to break even.
Risks investors often miss
Renewal and refinance risk: Stress test rates and flat rents can tighten terms.
Vacancy and turnover: One empty month erases thin margins.
Capital expenses: Roofs, HVAC, windows, and foundations compress returns fast.
Policy changes: Licensing and rent controls can shift economics quickly.
Rate trajectory: Cuts help, but a return to 2020–2021 levels is unlikely soon.
New help: insured refinance for adding a secondary suite You can refinance with mortgage insurance when funds are used to add a new legal, self-contained unit to your existing home.
Program details: CMHC Refinance to Add a Secondary Suite
Use cases: Finish a legal basement unit or add a garden or laneway suite where allowed.
Benefits: Access insured pricing and higher loan-to-value tied to adding rental supply. You improve cash flow after completion and have a clearer path to your next refinance.
Compliance: Meet municipal bylaws and building code. Expect permits, fire separation, egress, and parking where required.
Investor strategies that work now
Convert your current home to multifamily
Live-in advantage: Add a legal second suite so you can live in the property and collect rent from the new unit. This lowers your monthly carrying costs immediately. When you move out later, you have income from two suites.
Income lift: Often $1,500–$2,200 per month for a quality, legal suite in the GTA, subject to area and bylaws.
Funding: Use the insured refinance above, or pair a HELOC with a take-out refinance after stabilization.
Outcome: Two income streams reduce vacancy risk and improve debt service.
Sell and buy an existing duplex/triplex/fourplex
Why: Better rent-to-price ratios and diversified income.
Stability: Vacancy or repairs in one unit affect only part of total revenue.
Appraisal: Permits plus leases support cleaner take-out financing.
Buy a single-family that’s easy to convert
Target features: Separate side entrance, 6’8”+ basement height, parking for two or more, favorable zoning or as-of-right bylaws.
Budget line items: Permits, fire separation, egress, soundproofing, electrical, kitchens, baths.
Outcome: Faster approvals, lower construction risk, stronger refinance once leased.
Purpose-built secondary units: laneway and garden suites
Pros: New-build reliability and strong tenant appeal.
Watchouts: Servicing, setbacks, lot coverage, and parking rules.
Student-proximate properties
Play: Higher per-bedroom yield near transit and campuses, with disciplined screening and management.
Why this beats refinancing to buy another single-family
Yield: Multifamily income per dollar of purchase price is stronger in today’s market.
Risk: Multiple units spread vacancy and repair shocks.
Financing: Rental offsets improve approval odds and terms.
Exit: With permits, leases, and stabilized income, you regain A-lender access faster on refinance.
How we structure your financing
65–80% LTV using rental offsets, matched to lender policy
Extended amortizations where appropriate
Renovation financing to fund conversion work
Bridge financing to align purchase, reno, and refinance timelines
Portfolio planning to preserve Tier 1 access as doors increase
When a single-family rental still works
You will add a legal secondary suite within 12 months
You secured a materially below-market price
You have high, stable income and want a specific school district, and you accept short-term losses
You have patient capital and a defined exit
Next steps If you own a single-family home, evaluate a legal conversion before refinancing to buy another single-family rental. If you plan to purchase, focus on existing small multiplexes or single-family homes with straightforward conversion potential. Review the insured refinance option for suite additions here.
Book a 30-minute discovery call. Bring one property you own or a listing you’re considering. You’ll get:
A conversion feasibility checklist by municipality
Rent comps and rental-offset scenarios
Renovation budget ranges and timeline
Financing structure, monthly cash flow, and a 12-month refinance plan