Buying an Investment Property in Markham: The Rules That Bind You

The rules decide the returns

Most rental analysis starts with price, rent and interest rate. In Ontario those three sit inside a framework that limits what you can do with them and the framework is where the surprises live.

You cannot raise the rent by more than the guideline on most units. You cannot raise it more than once a year. You have to use a prescribed lease. And when you want to sell, the tenancy goes with the property.

None of that makes a rental a bad investment. It does mean a spreadsheet built without these rules is describing a property that does not exist.

The rent increase guideline

Year	Guideline
2026	2.1 percent
2025	2.5 percent

The guideline is the most a landlord can raise the rent for most tenants without approval from the Landlord and Tenant Board. Rent can be increased once every 12 months, measured from the last increase or from the start of the tenancy and the tenant must receive written notice in the proper form at least 90 days before it takes effect.

Model this honestly. A unit held for ten years under guideline increases produces a rent that drifts below market and the gap widens every year a tenant stays. That is not a criticism of the rule. It is the arithmetic you are buying into. It is the reason a long tenancy affects what the property is worth to the next owner.

The November 2018 line and why it decides everything

This is the most consequential thing in this guide.

The guideline does not apply to new buildings, additions to existing buildings and most new basement apartments that were occupied for the first time for residential purposes after November 15, 2018.

Two Markham condos can be physically similar, in similar buildings, at similar prices and sit on opposite sides of that date. One is capped at the guideline for as long as the tenant stays. The other is not. Over a ten year hold those are different investments.

So before you model anything, establish when the unit was first occupied for residential purposes. On a newer building in Downtown Markham that question has a real answer and it is worth the effort to get it.

The standard lease

Ontario requires landlords of most private residential rental units, from individuals to property management companies, to use the standard lease template for all new leases.

This is not a formality. Using your own agreement instead gives the tenant the right to ask for the standard one. It can affect what you are able to enforce later. If you are buying your first rental, download the current template and read it before you buy, because it tells you exactly what you are signing up to.

Selling a property with a tenant in it

You can. The tenancy runs with the property, so the buyer takes on both the unit and the lease.

What that does to your sale depends on the rent:

• Rent near market: the tenancy is close to neutral and may even help, since an investor buys an income stream without a vacancy.
• Rent well below market: your buyer pool narrows to investors who will accept that income and owner occupiers largely drop out. That shows up in the price.

Where a purchaser intends to occupy the unit themselves, Ontario requires that the landlord give the tenant the equivalent of one month’s rent or offer another unit. Handle this properly and through your lawyer. It is an area where shortcuts generate applications to the Landlord and Tenant Board. Those take time you will not get back.

Where investors look in Markham

TRREB’s community medians for January to March 2026 across all property types put Thornhill at $663,000 and Unionville at $736,500, both pulled down by condo apartment sales rather than by cheap houses. Those condo markets, along with Downtown Markham, are where most small investors in this city start, because the entry price is reachable and the tenant pool around transit and employment is real.

Our guides to Downtown Markham, Thornhill, Unionville and Milliken Mills describe those areas. Our post on condo status certificates covers what to have your lawyer check in the building’s finances before you commit, which matters more to an investor than to anyone else: a special assessment lands on the owner, not the tenant.

The foreign buyer tax

Ontario’s non-resident speculation tax applies to residential property anywhere in the province at 25 percent, for foreign nationals, foreign corporations and taxable trustees. It is charged on the full value of the transaction where any single transferee is a foreign entity rather than prorated by ownership share.

For an investment purchase structured among several people, that detail is the one to raise with a lawyer before the offer.

Basement apartments and secondary suites

A secondary suite is the most common way into this in Markham and the first questions are legal rather than financial: does the unit comply with the City’s requirements and the fire code and when was it first occupied for residential purposes.

Answer those before you underwrite the income. An apartment that cannot lawfully be rented is not producing income and buying one on the assumption that it can be fixed later is how people lose money on an otherwise sound house.

What we tell investors

We will run the honest version of the numbers with you, including the guideline drift over a realistic hold and what a below market tenancy does to your eventual sale. Where the answer is that the property does not work as a rental at the asking price, we say so.

If you want that read on a specific Markham property before you make an offer, there is no charge and no obligation. Bring the lease and the occupancy date and we will tell you what we see.