Real estate investing outside the GTA typically gives you a better bang for you buck. I’ve been speaking with a bunch of investors over the past couple weeks and I’ve run this example multiple times so I figure it’d be good to write a post about.

Let’s crunch the numbers.

Let’s say a townhouse in Kitchener vs. a townhouse in Mississauga.

Kitchener Townhouse
kitchener townhouse
Purchase price = $333,000
Downpayment = $66,600 (20%)

Monthly mortgage payment = $1,078 (2.7% interest rate at 30 year amortization)
Monthly Property tax = $252
Monthly home insurance = $75

Total monthly carrying cost = $1,405

Monthly Rent = $1,600

NET Monthly Profit = $195

Yearly ROI on down payment (monthly profit + principle pay down) = 13.2%


Mississauga Townhouse
mississauga townhouse
Purchase price = $545,000
Downpayment = $109,000 (20%)

Monthly mortgage payment = $1,764 (2.7% interest rate at 30 year amortization)
Monthly Property tax = $268
Monthly home insurance = $75

Total monthly carrying cost = $2,107

Monthly Rent = $1,800

NET Monthly LOSS = -$307

Yearly ROI on down payment (monthly profit + principle pay down) = 6.3%


As you can see, the Kitchener home has a lower purchase price so it requires less down payment, has a higher ROI percentage per year and has a positive monthly cash flow. While the Mississauga house requires a higher down payment because of it’s higher price, however it only rents for slightly more causing it to have a negative monthly cash flow. The yearly ROI is still decent at 6.3% for an investment. In terms of the absolute dollar value on the ROI, Kitchener is still higher from the 13.2% of $66,600 vs. the 6.3% of the $109,000.

To make it simple, these numbers do not include appreciation. When I coach investors, appreciation is a bonus, it’s not guaranteed. But if you invest in fundamentally good economic areas, the appreciation will be there. The two main numbers to look at is the monthly cash flow and the principle pay down.

I also did not include vacancy or maintenance allowance to keep it simple.

All numbers are estimate, so due your due diligence on each property.

This is just to give you an example of real estate investing outside the GTA where you can stretch your dollar a little further…especially with the way house prices are going!