Real estate remains among Canada’s top choices for building long-term wealth. A recent survey found that 87% of Canadians feel more confident investing in real estate than in publicly traded stocks. This isn't just sentiment; 76% of the Canadian real estate investors surveyed own properties beyond their primary residence.1

The truth is, real estate offers unique advantages that traditional investments can't match. A rental property provides multiple income streams, delivering monthly rent payments while simultaneously building equity and appreciating in value. Plus, leverage amplifies returns: Even if you put down 20%, you’ll benefit from 100% of the property's appreciation gains. Tax deductions on rental expenses can further boost profitability.3

When executed wisely, rental properties can deliver steady cash flow today and significant wealth tomorrow. But success starts with preparation—knowing how rentals make money, who is best suited to invest, what to look for, and where to start.

How Rental Properties Build Wealth

Great rental properties create wealth through three primary channels that work together to compound returns over time:

●      Cash Flow represents net monthly income after expenses. The formula: Total rent minus all expenses (mortgage, taxes, insurance, maintenance, management fees, etc.). A duplex renting for $3,300 monthly with $2,700 in expenses generates $600 monthly positive cash flow—money for profit or reinvestment.

●      Appreciation refers to property value increases over time. According to Canadian MoneySaver, nationally, the housing market has averaged 6% yearly appreciation since 1975.4 A 6% annual appreciation on a $400,000 house adds $24,000+ to your equity annually from market gains alone.

●      Equity growth also occurs as mortgage payments reduce loan principal. Ideally, tenant rent effectively covers these payments, so tenants are purchasing the property for you i...