Trends, News, Tips, Tricks, and Strategies to help you with your investment needs for Condos and Real Estate.

Feeling Positive About Cash Flow - new-mortgage-rates@2x

Feeling Positive About Cash Flow


Expert Analysis

You may have heard some of the recent reports stating that a good chunk of Toronto Condos have a negative carry; meaning the inward cash flow on a property—the money received from rent—does not cover the cost of mortgage and condo fees at the end of each month.

Wait a second… losing money each month? Isn’t that a bad investment?

Quite the contrary; if you know what you’re doing, negative carry is hardly a concern.

The number we see a lot of individuals referencing is the one put forth by CIBC Economics citing that over 44% of Toronto condo investors don’t get enough rent to cover the mortgage . To put that in a more “glass half full” point of view, that still means that over half of condo owners are in a positive cash flow state. And many of the ones who are negative are likely not working with the leading Asset Management companies (unlike yourself!).

When you’re looking at a market such as the Greater Toronto Area, where appreciation in certain areas were as high as 50% last year, a small amount of negative cash flow is hardly a reason to worry. At the end of the day, your ROI from the appreciation of your property is going to completely surpass any kind of losses you incur from negative cash flow.

Stick with us and we’ll show you some of the numbers that will put your mind at ease.

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The problem with all these news stories focusing on a negative cash flow statistic is that it implies that an investor’s primary goal in real estate is to have a positive cash flow. It makes for a great headline, but it misses the big picture.

In a city such as Toronto, where housing prices are relatively high, you’re going to have more of a challenge finding a property with a positive cash flow. If that your goal is more monthly cash, it would make much more sense to look for a property a few hours outside of the GTA, where housing prices are

much lower. Here you could purchase a multi-unit complex and you could achieve positive cash flow fairly easily collecting rent on a low cost property.

However… you wont see anything near the appreciation values that you will on a property in Toronto.

If you’re living paycheque to paycheque… then yes. You should probably look for a cash positive real estate investment, because those monthly losses can hurt. But if your ultimate goal is long- term return on investment, you’d be crazy to forgo purchasing a property with high potential appreciation in favour of a property that’s likely to be cash flow positive.

ROI on Cash Flow vs Appreciation

Here’s an example with some very conservative estimates. Let’s say after paying mortgage and condo fees, you’re clearing $500 a month, which is a fairly good number! That’s $6000 a year. Not bad!

Compare that to a condo that appreciates $100,000. To match the return from appreciation, you would need 42 years of cash flow income! As compared to 3 or 4 years of much larger gains in appreciation while maintaining a negative cash flow month to month.

Hypothetical $400,000 Condo Investment

Cash Flow Income

$500 per Month X 12 Months = $6000 Per Year

Appreciation Income

$400,000 X 5% Appreciation = $20,000 Per Year

Of course, netting $500 per month is extremely rare in any market if you’re only putting 20% down. But, 5% appreciation of real estate has been seen for decades, and furthermore, if you look at the appreciation of Condos in the past 5 years in Toronto, you can expect a lot more than just 5% yearly.

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Even though it’s not the end of the world to have negative cash flow on your property, our goal is to help you reach a positive cash flow, or at least get you as close as possible to breaking even month to month.

Obviously, the more money you can put down up front will improve your cash flow… but we understand that’s not an option for everybody.


Condo buyers can hit all kinds of snags when purchasing. Bad advice from realtors, buying the wrong condos, paying the wrong price, buying at the wrong time, and buying the wrong kind of units can all lead to higher costs and lower rents on your property.

By working with us, you’re buying at a lower price, and you’re positioned to get a better amount of cash flow on your condo investment. We leverage our relationships to give you early access to amazing properties at great prices. We know the market, and can point you in the right direction to help you achieve your personal goals. On some properties, we even offer rental guarantees.

Luckily for you, by the very nature of paying down your mortgage–and therefore paying less towards interest every month– combined with Toronto’s increasing rental rates, your cash flow will increase over time.

As mortgage payments go down, and rent goes up (and it’s gone up quite a bit, if you take a look at the graph to the right), you will close the gap and improve your cash flow.

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Toronto’s increasing rent prices throughout the 2010s

More rental income means better monthly returns


1. Leverage our Relationships with Developers for Better Pricing

2. Expert Advice on the best properties with high potential appreciation

3. Rental Guarantees on your Property

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