This page answers whether buying a condo to rent out makes financial sense in Canada: how condo prices compare with rents by city, what the cash flow looks like on a typical purchase, and the condo-specific risks (fees, special assessments and rental restrictions) that a house or multiplex doesn’t carry. It is part of WealthNorth’s guide to investment property financing. Whether to buy a condo to live in, rather than rent one, is a different question, covered by the rent vs buy calculator.
Condo prices against rents, by city
The table compares each city’s average (or benchmark) condo apartment price with the current asking rent for a two-bedroom apartment, and sorts the cities by gross yield. It updates when either data source does.
| City | Condo or apartment price | Price measure | Two-bedroom asking rent (second quarter of 2026) | Gross yield | Price ÷ annual rent | Mortgage payment at 20% down | Rent minus mortgage |
|---|---|---|---|---|---|---|---|
| Edmonton | $208,672 | Average sale price, apartment condo (RAE, September 2026) | $1,570 | 9.0% | 11.1 | $923 | $647 |
| Ottawa | $385,500 | MLS benchmark price, apartment (OREB, July 2026) | $2,360 | 7.3% | 13.6 | $1,705 | $655 |
| Calgary | $318,759 | Average sale price, apartment (CREB, September 2026) | $1,890 | 7.1% | 14.1 | $1,410 | $480 |
| Winnipeg | $283,715 | Average sale price, condominium (WRREB, August 2026) | $1,660 | 7.0% | 14.2 | $1,255 | $405 |
| Vancouver | $682,500 | MLS benchmark price, apartment (GVR, September 2026) | $3,030 | 5.3% | 18.8 | $3,019 | $11 |
| Victoria | $605,399 | Average sale price, condo apartment (VREB, September 2026) | $2,640 | 5.2% | 19.1 | $2,678 | −$38 |
| Toronto | $617,593 | Average sale price, condo apartment (TRREB, August 2026) | $2,650 | 5.1% | 19.4 | $2,732 | −$82 |
Sources: local real estate board reports via WealthNorth's housing market data; Statistics Canada Table 46-10-0092-01, quarterly average asking rents (second quarter of 2026). Mortgage at the Bank of Canada's average rate on new uninsured fixed-rate mortgages of 5 years or more (4.49%, July 2026), 25-year amortization, compounded semi-annually. "Rent minus mortgage" leaves out property tax, condo fees, insurance, vacancy and repairs, which all come out of the difference.
Gross yield is only a screen; cap rate measures the income after operating costs. A condo’s operating costs (condo fees, property tax, insurance, vacancy and repairs) typically take a large share of the rent before the mortgage is paid, so a city near the top of the table can still produce negative cash flow at today’s rates. The rental property calculator turns a specific unit’s numbers into cash flow, cap rate and cash-on-cash return, and best cities for investment property adds vacancy rates and landlord rules to the comparison.
Cash flow examples: an expensive and a cheaper condo
Two illustrative purchases, each with 20% down at an example 4.5% rate over 25 years and a 5% vacancy allowance. Prices, rents and costs are assumptions chosen to show the pattern, not market data.
| Line (monthly) | $600,000 one-bedroom | $270,000 one-bedroom |
|---|---|---|
| Rent | $2,300 | $1,550 |
| Less 5% vacancy | $2,185 | $1,473 |
| Condo fees | −$600 | −$400 |
| Property tax | −$250 | −$150 |
| Insurance and repair reserve | −$100 | −$80 |
| Mortgage payment | −$2,657 | −$1,196 |
| Cash flow | −$1,422 | −$353 |
Over the first year, the $600,000 condo’s owner puts in about $17,060 to cover the shortfall, while the mortgage principal falls by about $10,697. At a 2% appreciation assumption ($12,000) the total first-year return is about $5,600 on $120,000 of down payment, about 4.7%, and negative with no appreciation. The $270,000 condo’s owner covers about $4,236 a year while paying down about $4,813 of principal; at a 3% appreciation assumption ($8,100) the first-year total is about $8,700 on $54,000 down, around 16%. In both cases the cash flow is negative; the cheaper unit’s condo fees and tax are a smaller share of its rent, which is the pattern the city table shows.
Condo vs Freehold: Investment Comparison
| Factor | Condo | Freehold (House / Multiplex) |
|---|---|---|
| Purchase price | Lower entry point | Higher (but more rental potential) |
| Condo fees | Monthly, and they tend to rise over time | None |
| Maintenance control | Board-managed (no control) | Owner-controlled |
| Special assessments | Possible: a one-time charge set by the condo corporation | You control when and how to repair |
| Land | A share of the common land only | The lot is yours; land usually holds its value while buildings wear out |
| Rental restrictions | Depends on the province: an Ontario declaration can restrict rentals, while BC strata corporations can no longer restrict long-term rentals; short-term rentals can be limited in both | Only municipal and provincial rules |
| Cash flow | Lower (condo fees are a drag) | Higher potential |
| Scalability | Limited (one unit at a time) | Multiplexes = multiple units in one purchase |
| Management effort | Low (building exterior/common areas are handled) | Higher (everything is your responsibility) |
The Condo Fee Problem
Condo fees are the cost that most separates a condo’s numbers from a house’s. They tend to increase over time, and the condo corporation, not the owner, sets them.
How Condo Fees Grow
| Year | Monthly Condo Fee (3% Annual Increase) | Monthly Condo Fee (5% Annual Increase) |
|---|---|---|
| Year 1 | $500 | $500 |
| Year 5 | $563 | $608 |
| Year 10 | $652 | $776 |
| Year 15 | $756 | $990 |
| Year 20 | $877 | $1,263 |
| Year 25 | $1,016 | $1,613 |
A $500/month condo fee growing at 5% per year reaches $1,613/month by year 25. If rent doesn’t rise as fast as the fee, cash flow shrinks every year.
What’s Included in Condo Fees
In Ontario, condo fees (common expenses) pay for maintaining the common elements, contributions to the reserve fund, and services such as cleaning, building maintenance and condo management. What else they include, such as heat, water or parking, varies by building: check the corporation’s budget.
Higher condo fees don’t always mean lower quality. Part of every fee goes to the reserve fund, which pays for major repairs and replacements of the common elements; a reserve that keeps pace with its study makes a special assessment less likely. The reserve fund study shows whether it does.
Warning signs in a condo’s fees
| Warning sign | What it can mean |
|---|---|
| Reserve fund well below what the reserve fund study recommends | A special assessment or steep fee increases ahead |
| Special assessments in recent years | Ongoing building problems |
| Fee increases well above inflation year after year | Rising costs or past underfunding being corrected |
| Fees far below similar buildings | The reserve may be underfunded |
| Pending lawsuits against the corporation | Owners can end up sharing the cost |
| Deferred maintenance noted in board minutes | Large repairs coming |
Special Assessments: The Hidden Risk
| What It Is | A one-time charge for major repairs or upgrades not covered by the reserve fund |
|---|---|
| Common causes | Roof replacement, parking garage repair, elevator modernization, window replacement, balcony repair, plumbing |
| Your share | Owners must pay their share, which in Ontario is calculated with the same percentage as their common expense fees; unpaid amounts can become a lien on the unit |
| Warning signs | Low reserve fund balance, an aging building, deferred maintenance, recent engineer reports |
How to Avoid Special Assessment Surprises
| Action | Details |
|---|---|
| Read the status certificate | In Ontario anyone can request a condo unit's status certificate, which sets out key information about the unit and the condo corporation; the corporation can charge up to $100, including taxes and materials, and must offer it at that price within 10 days (faster delivery can cost more). Buyers should review it with their lawyer. Other provinces have equivalent documents |
| Review the reserve fund study | Ontario requires a new study at least every 3 years; other provinces set their own schedules. Check whether the fund matches the study’s plan |
| Check meeting minutes (last 2 years) | Look for discussions about upcoming repairs, assessments, or fee increases |
| Inspect the building (not just the unit) | Hallways, parking garage, roof, elevator age, mechanical systems |
| Ask the condo manager directly | “Are any special assessments planned or under discussion?” |
| Weigh the building’s age | Newer buildings have fewer major components near replacement; in Ontario, new condos come with the builder’s warranty backed by Tarion (one-, two- and seven-year coverage) |
Rental Restriction Risk
| Type of Restriction | Impact on Investors |
|---|---|
| No rental restrictions | Best for investors |
| Minimum lease term | Rules out short stays; limits flexibility |
| Cap on the share of units that can be rented | Once the cap is reached, new buyers can’t rent |
| No short-term rentals | Cannot Airbnb; limits flexibility |
| No rentals allowed | The unit can’t be used as a rental |
Rental rules depend on the province. In British Columbia, no strata corporation can have a rental-restriction bylaw since November 24, 2022, although short-term rentals can still be limited. In Ontario, the declaration can restrict rentals, changing it needs the consent of 80% of the units, and the board can make rules that limit short-term rentals. Check the declaration, bylaws and rules before buying.
New build vs resale
| Factor | New build (pre-construction) | Resale |
|---|---|---|
| Price and fees | The first budget has no operating history, so condo fees can rise once the building’s real costs are known | Price negotiable; fee history available |
| Timeline | Often several years from deposit to occupancy, with the market and rates moving in between | Closes in weeks |
| Documents | No operating history or status certificate yet | Status certificate (or provincial equivalent), reserve fund study and minutes available |
| Warranty | New home warranty (in Ontario, Tarion) | Generally none |
| Sales tax | GST or HST applies to a new home. An investor who rents it out may qualify for the new residential rental property rebate, if the first occupant is a tenant who lives there as their primary residence for at least a year: 36% of the GST (or federal part of the HST), up to $6,300, in full up to $350,000 and none from $450,000 (see CRA guide RC4231) | No GST or HST on a used residential resale |
| Closing risk | If values fall, the appraisal can come in below the price and you must cover the gap | The price and appraisal are set at the same time |
When a Condo Investment Makes Sense
| Scenario | Why It Works |
|---|---|
| Cities near the top of the price-to-rent table above | Rent is higher relative to price, so fees and tax take a smaller share of it |
| Pre-construction (with caution) | Lock in today’s price; assignment potential; but closing risk and condo fee risk are high |
| Purpose-built rental condo | Designed for investors; no rental caps; professional management |
| New build with low condo fees | Fees start low, but expect them to rise once the building’s real costs are known |
| Transit-oriented location | Strong and growing rental demand; future appreciation from transit infrastructure |
| Student housing market | High demand; lower purchase price; stable occupancy if near a university |
When a Condo Investment Does Not Make Sense
| Scenario | Why It Fails |
|---|---|
| Cities near the bottom of the price-to-rent table | Rent falls short of, or only just covers, the mortgage before any other cost, so the return depends on appreciation |
| Older building with a low reserve | Special assessment risk; rising condo fees |
| High condo fees relative to the rent | Erodes cash flow |
| Rental-restricted condo | May not be able to rent at all |
| Oversupplied market / many new builds coming | Rents plateau or drop; appreciation stalls |
Condo Investment Checklist
| Item | What to Check |
|---|---|
| Reserve fund study | Adequately funded? Up to date under your province’s rules? |
| Status certificate / estoppel certificate | Clean? Any litigation? Special assessments pending? |
| Condo fee history | Rate of increases over last 5–10 years |
| Rental rules | Any restrictions on renting? |
| Building age and condition | Major systems (roof, elevator, plumbing) age and status |
| Comparable rents | Verify market rent using Rentals.ca and CMHC data |
| Cash flow analysis | Run full numbers including condo fees, taxes, vacancy |
| Condo board meeting minutes | Any concerning discussions or upcoming expenses? |
| Insurance certificate | Building coverage adequate? Your landlord policy in place? |
Related Resources
Sources
The figures and rules on this page come from these sources, last checked against them between September 24, 2026 and October 2, 2026. How we check facts.
- Bank of Canada: Mortgage rates, fixed 5 years and over: uninsured residential mortgages, funds advanced (data series)
- Bank of Canada: Conventional 5-year mortgage rate (data series)
- Bank of Canada: Conventional 5-year mortgage rate (data series)
- Bank of Canada: Conventional 5-year mortgage rate (data series)
- Bank of Canada: Data table
- Canada Revenue Agency: GST/HST New Residential Rental Property Rebate
- Condominium Authority of Ontario: What is a status certificate and how much does it cost - Condominium Authority of Ontario
- Condominium Authority of Ontario: Reserve Funds and Reserve Fund Studies - Condo Authority
- Condominium Authority of Ontario: The Declaration - Condominium Authority of Ontario
- Financial Consumer Agency of Canada: How much you need for a down payment
- Government of British Columbia: Changes to strata legislation
- Rentals.ca: Rentals.ca National Rent Report
- Statistics Canada: Asking rent and paid rent prices, by rental unit type and number of bedrooms,…
- Tarion: What is the new home warranty | Tarion.com