Investment Property in Ottawa - A Comprehensive Guide

Invest smarter with this data-driven analysis of Ottawa and its best neighbourhoods for real estate investing.

by John Castle

Published : 11 Feb 2023

Updated : 20 Feb 2023

TOPICS: Investment Property in Ottawa

39 Minute Read

World class real estate analysis.

Focused on Ottawa.




John Castle


John is a data driven real estate agent and advisor with an accounting and business background.

John has provided expert Opinion to Forbes, Yahoo! Finance, the Ottawa Citizen, and other publications.


Income property in Ottawa is affordable and appreciates steadily. However, performance varies among neighbourhoods and, in some cases, within them. In this article, you’ll get a data-driven analysis of the investment real estate market at both the city, and neighbourhood, levels.

Ottawa is the fastest growing major metro in Canada and its real estate market is the least volatile in the country. Tenants are law abiding and well employed. Compared to Canada’s other metros (pop. >1m), Ottawa has 

That said, superior real estate investment decisions require an understanding of the market at both the city level and neighbourhood level. However, neighbourhood level data is difficult to find, and a comprehensive data-driven picture of the city and its neighbourhoods takes work to put together. Fortunately, that’s been done for you here. In this article, city and neighbourhood-level data has been researched, organized, and paired with expert insight from Forbes featured investment realty specialist, John Castle. 

Price of Income Properties in Ottawa

“Is this property a good deal?” - It’s a simple question that captures the essence of every investment decision. No matter how sophisticated our decision making is, we all derive our answer to that question from three facts:

  1. How much the investment property will cost you. 
  2. How much the investment property will benefit you.
  3. How the cost and benefit of the investment property compare to others.

So in order to make a good investment decision we need to know all about the cost and benefit of the property and the costs and benefits of comparable properties. Most of this article is focused on factors that affect the benefit side of the equation - but in this section, we’ll focus on the cost side. Specifically, we’ll look at the per-unit purchase price of multi unit residential rental properties and single family rental properties in Ottawa’s most rentable neighbourhoods. We’ll also look at whether residential real estate in Ottawa is, on the whole, a good deal. To do that, we’ll look at how prices in Ottawa compare to prices around Canada and to prices in other comparable cities around the world. 

 Price of multifamily investment properties in Ottawa

QUESTION: How much do income properties cost in Ottawa?

ANSWER: The per-unit price of a multifamily investment property in Ottawa is generally between $235,000 to $330,000. Prices vary greatly by neighbourhood, the size of the structure, and the condition of the structure.


As of this writing, smaller multi-family properties in Ottawa sell for $330,000/unit on average; larger multi-family properties (20 + units) sell for approximately $235,000/unit. Prices will vary according to the condition of the structure, the number of units in the structure, and, especially, by location. Consider the difference between the median per-unit cost of multi-family properties in these neighbourhoods.

Ottawa $362k/unit Median

Vanier $242k/unit Median

Carlington: $283k/unit median

Sandyhill $360k/unit median

Lowertown $363k/unit median

Glebe: $514k/unit median

Westboro: $420k/unit median

Prices in other cities compared with prices in Ottawa

QUESTION: How expensive is Ottawa real estate?

ANSWER: Ottawa’s residential real estate market is the least expensive of the G7 capitals. It is also less expensive than the overall Canadian market. The average price is $2


Income property prices and single family home prices track each other. As such, we can gain insight into the relative-value of investment properties in Ottawa by comparing the prices of single family homes in Ottawa with the prices of single family homes in comparable cities. 

Among capital cities in the G7, Ottawa residential real estate is the least expensive on a per-square-meter basis. 

 A graph of real estate prices in G7 capitals. Ottawa is $3410/meter. Other cities are more expensive
Calculated by area, residential real estate in Ottawa is less expensive than it is in other G7 Capitals. 2023.

Condominium prices serve as a reasonable proxy of multi-family unit prices (when the two become too detached, development shifts to the more expensive of the two). On that measure, Prices in Ottawa rank below the national average. 

 A table displaying the benchmark price of condominiums apartments in various Canadian cities
 Benchmark prices of condominium apartments in Canada’s major metros 2023
Source: CREA,

I’ve written an article worth of information on price trends and the relevant data. 

Notable Neighbourhoods for Rental Properties in Ottawa

The performance of investment real estate in Ottawa differs greatly between neighbourhoods. For that reason, analysis at the neighbourhood level is (vastly) more important than analysis at the city level. 

Consider that Ottawa residential realty appreciated at an average annualized rate of 6.7% over the last decade (2013-2023) but the differences among neighbourhoods are considerable, with the rate of appreciation in the fastest appreciating neighbourhood being double the rate in the slowest appreciating neighbourhood (7.6% vs 3.8%). 

When projecting rental revenue for a particular investment property, neighbourhood data is at least as informative as the rent receipt records. The rent roll will tell you the rent what a landlord has accepted for a unit, but it won’t tell you what the tenants would have paid for it. In contrast, neighbourhood data tells us what people are willing to pay to live in a neighbourhood. Additionally, the rent receipt records don’t provide enough data to reliably project vacancies, turnover, and delinquencies. A larger sample size is needed, and neighbourhood data provides that. Lastly, the current landlord’s approach to management will have influenced the performance of the rental property. Neighbourhood data gives us insight into how the property might perform under typical conditions. 

In this section, you’ll find neighbourhood level insights gleaned from the thorough analysis of six different data sources. You’ll also find links to more in-depth data-driven analyses of the investment property in each neighbourhood. New neighbourhoods are added the first Monday of every month. Data is updated quarterly. 


Vanier is replete with opportunities for speculators: Renewal (gentrification) has been fast and focused in the north-west in what has recently been named “Beechwood Village”. Some dispersed renewal is observable in the south near Overbrook. 

The slower pace of renewal in the south and the limited range of renewal in the north combined with the relocation of the Salvation Army emergency shelter to Montreal Road collectively suggest that appreciation in the center (between, and around, Montreal Road and McArthur Avenue) will be more limited. 

With cap rates well above the city average, rental property investors seeking cash flow will find opportunities in Vanier. These higher cap rates are largely a product of depressed property values. That depression is mostly a consequence of stigma, but partly a consequence of the overall condition of properties in the neighbourhood, which are twice as likely to need major repairs compared to rental properties throughout the city. 

The demand for high-end properties (both to rent, and buy) in the northwest along with the stock of properties in disrepair presents superior opportunities for infill developers and renovators. 

Byward Market

The values of centrally located properties generally increase faster than less centrally located ones. However, that has not been the case in the Byward Market, which has seen more gradual increases in value than Ottawa’s most peripheral suburbs (Kanata, Barrhaven, Orleans). This suggests that the value of the location of that part of the Market has been offset by other factors - specifically, the prevalence of substance addiction and its attendant social effects.

The concentration of supervised injection sites and drug rehabilitation facilities have integrated addiction into the neighbourhood. Three of four supervised injection sites are situated within 200M of the Byward Market. All three of Ottawa’s large emergency homeless shelters are located in the Market, or within 200M of it (although, one is relocating). The ratio of subsidized to unsubsidized dwellings is 70% higher in the Market than in Ottawa overall. It is nearly 100% higher in adjacent Lowertown. The City’s plan to curb homelessness includes more subsidized housing units. There is little reason to expect a reduction in the number of subsidized units in the Market. The crime rate in the neighbourhood is twelve times the rate for the city and six times the rate for Ottawa’s second most crime afflicted neighbourhood. 

Despite the foregoing appreciation dampeners, there are reasons for contrarian optimism: Ottawans have demonstrated their willingness to pay substantial premiums for hip neighbourhoods. Moreover, high-crime neighbourhoods have quickly gentrified shortly after gaining a reputation for hipness (see Hintonburg and Mechanicsville). The Byward Market is Ottawa’s only bonafide entertainment district - arguably Ottawa’s hippest neighbourhood. Once gentrification has run its course in Hintonburg and Mechanicsville, the Market will be the next source of affordable development opportunities in a centrally located vibrant neighbourhood. -- Or so that thinking goes. 

In fact, there is some evidence that people will pay a premium to live in the neighbourhood. Median rent for a two bedroom apartment near the entertainment district is 26% higher than it is in Ottawa overall, while median income among renters is only 3.6% higher. 

Higher than average rent and lower property values engender above average capitalization rates. 

Read the complete, in depth, analysis on income property investing in the Byward Market. 


Qualitatively, Lowertown seems positioned for renewal: It is centrally located and close to the vibrant Byward Market. Lowertown income properties, especially multi-family properties, are among the least expensive in the core. Moreover, despite its adjacency to Ottawa’s highest crime neighbourhood (the Byward Market), Lowertown is comparatively unafflicted. The crime rate in Lowertown is less than a sixth of the rate in the Byward Market. In fact, the area two blocks east of King Edward and two blocks north of Rideau is not more afflicted by crime than the city as a whole. 

The low crime rate, central location, proximity to the vibrant Byward Market, and inexpensive properties, collectively speak in favour of the possibility of urban renewal (and the associated value boost) coming to Lowertown. Housing starts do speak to some renewal, with some low rise apartments (11 units) starting construction in 2019. However, to date, property values in Lowertown have barely tracked inflation, and in some parts of the neighbourhood, have failed to hold their real (inflation adjusted) value.  

Read the complete, in depth, analysis on income property investing in Lowertown.

Sandy Hill

The proximity of the University of Ottawa perpetuates demand for rental units in the neighbourhood. Student renters turnover frequently. Consequently, the one year turnover rate is the highest in the city, which helps to ensure that scheduled rent keeps pace with market rents. 

For most of the last decade, property values in Sandyhill have risen slower than they have in Ottawa overall.  However, in the last three years, values near the university have moved vertically. In that area, the construction of multi-unit student housing has accelerated.  These newly constructed units have brought more students to the neighbourhood from areas to the south of Sandyhill. The shifting demographics of Sandyhill has adversely affected the appeal of single family homes in the demographically older eastern half of the neighbourhood. Consequently, property values have risen more slowly farther from the university. The dampening effect is most pronounced on properties in the east that are too small for builders to intensify. 

That said, there is still demand from high-income individuals for properties in the east of Sandy Hill, where rents are the highest among the neighbourhoods where renters predominate. 

Read the complete, in depth, analysis on income property investing in Sandyhill. 


The west of Carlington is replete with purpose built low-rise multi-family rental properties. Capitalization rates and appreciation are both above the city average. Dilapidation is more prevalent in west Carlington than it is in any other part of the city. 

Prices in Carlington are the lowest in the city. Single family homes in need of repair can be found in this neighbourhood for $400,000.

Read the complete, in depth, analysis on income property investing in Carlington.

Appreciation Rate of Investment Property in Ottawa

QUESTION: How quickly does real estate in Ottawa appreciate?

ANSWER: The price of residential real estate in Ottawa has increased at an annualized rate of 4.8% since 1957, 4.5% since 2010, and 6% since 2005.


What matters more?

  1. Cash flow
  2. Appreciation

Most investors will say the answer is A: cash flow. There are good reasons for that. However, too many investors focus so tightly on cash flow that they miss other important considerations, such as various risks and, most relevant to this section, prospective appreciation. 

The error is understandable: Cash flow is contractually guaranteed (for the most part). Whereas risk and appreciation are hard to quantify. It’s tempting to say ‘well, we can’t predict those things, so it’s just as well that our proforma doesn’t assume any changes’. However, opting to assume the status quo is still an assumption. Moreover, it’s not even clear that it’s a safe assumption to make. After all, other investors may be more interested in neighbourhoods with better prospects for appreciation, which, in turn, lowers the cost, and thereby, improves the relative cash flow, of properties in neighbourhoods with worse prospects for appreciation. As such, a real estate investor who focuses solely on cash flow will be disposed to concluding that the neighbourhoods with the worst prospects are the best investment. 

The cost of ignoring a neighbourhood’s appreciation potential can be significant. Consider that, historically (the last few exceptional years excluded), Ottawa’s modest but steady rate of appreciation accounted for over half of a real estate investor’s return.  

  • Real estate prices in Ottawa have increased, on average, 4.8%/year since 1957.
  • The average capitalization rate in Ottawa is 4.5%. 
 A pie graph depicting the relative returns derived from income and from appreciation.
Appreciation matters
Sources: OREB, CREA, Coldwell-Banker Richard-Ellis

So we know that appreciation is an important part of the return that investment property provides. Now we need to identify investment properties that are likely to appreciate quickly. In this section, we do exactly that. First we’ll look at the historical appreciation rates for Ottawa’s various rental neighbourhoods, then we’ll look at upcoming changes that may affect the value of investment property in the city. 

Appreciation Rate of Investment Property in Ottawa

QUESTION: How quickly does real estate in Ottawa appreciate?

ANSWER: About 4%-5% annually; notwithstanding the recent spike in prices and the inflationary period of the 70s and 80s.


Change in the Average Sale Price in Ottawa

As a rough and ready take on the course of real estate prices over time, we can reference the average annual sale price. 

YearAverage Price1 Year Change10 Year Annualized Change

Now, we need to note that using the change in average sale prices as an approximation of appreciation will put our estimate a bit higher than it should be.


Appreciation is a measure of the rate of change of the value of a particular property; whereas average sale prices take into account every property sold on the market in a given year. The characteristics of the properties on the market change over time. However, the characteristics of a particular property remain constant through that change. For instance, the typical home sold in 1956 isn’t going to be comparable to the typical home sold in 2021.  

Moreover, while that typical home sold in 1956 would have been of average age in 1956; in 2021, it is now older relative to the rest of the market, which will cause its value to deviate from the average. 

Change in the Average Sale Price of a Cohort of Properties

So how do we measure appreciation (and not change in average market prices). One way is to look at the change in the average sale value of a cohort of homes. For example, we might look at the change in the average sale price of all homes built between during a period. By restricting our search to homes build during one period we can be more confident that we’re looking at the same kind of houses (on the whole) at the beginning of the period in question and at the end of that period. 

Decade BuiltYear 2000 PriceYear 2021 PriceAnnualized Change

Appreciation by neighbourhood

Ottawa residential realty increased at an average annualized rate of 6.81% over the last decade (2012-2022), but that rate varies considerably by neighbourhood. Consider the 10 year annualized real appreciation rates for single family homes throughout the city. 

A bar graph depicting the annualized rates of appreciation in various Ottawa neighbourhoods.
Appreciation matters
Sources: CREA

The difference is even more pronounced when we compare areas of the city at the sub-neighbourhood level. For illustration, consider the following 10-year annualized real appreciation rates (i.e. appreciation rates net of inflation) between 2010 and 2020 (i.e. with the unusual covid era appreciation removed).

  • East side of Carlington: 5.30%
  • West side of Carlington: 1.12% 
  • Southern side of Lowertown: -1.38%
  • Northern side of Lowertown: 2.65% 

Differences in annualized gains look small until you look at the cumulative effect over a number of years. Consider the cumulative appreciation in five Ottawa neighbourhoods listed below. 

 A bar graph depicting the cumulative appreciation in various Ottawa neighbourhoods
 Appreciation varies by neighbourhood. Seemingly small differences can become substantial overtime.
Sources: CREA

Appreciation predictions for residential real estate

QUESTION: Will real estate prices in Ottawa go down?

ANSWER: In the short term, higher interest rates will continue to put pressure on prices. Over the longer term, record immigration and major shortages of construction labour will likely result in rising prices as supply lags demand.


It’s generally accepted that when the cost of financing property rises, the market value of property falls. It seems to be that the decision to buy a property is largely a function of the monthly payments that must be made to carry it (not its sticker price). Indeed, the ability of a buyer to qualify for a loan is often a matter of the ratio of that loan to the income the property generates.

It’s also generally accepted that real estate prices are ‘sticky’ on the way down. 

Another important aspect of housing market efficiency is that prices tend to be sticky downward. In most markets, when excess supply develops, prices fall quickly to clear the market. But housing downturns have been characterized by sticky prices. Sales and starts drop but prices are slow to respond.

- Karl Case


If the qualifying ratio for the bank doesn’t change, then any rise in the cost of borrowing must be offset by 

  1. a commensurate decline in the cost of the asset, 
  2. an increase in income generated (higher rents), or
  3. a reduction of leverage (larger down payment). 

Reducing leverage reduces the capital available to invest in property, which also puts pressure on prices. So, two of the three ways of offsetting higher interest rates point to softening asset prices.

That softening effect will likely manifest gradually. However, we should expect it to be countervailed, to some degree, by rising rents. 

In its spring 2022 analysis, the CMHC remarked

Some of the factors that could increase rental housing demand include: the return of students to campuses; growing immigration; and an increase in youth employment. … This, along with the end of the 2021 rent freeze in Ontario, should put upward pressure on rents.



The combined effect, according to the CMHC, will be relatively flat, or slightly elevated prices until 2024. 

A line graph depicting the predicted price appreciation in Ottawa.
In the near term real estate appreciation in Ottawa is expected to return to its historic pace.
Sources: CMHC

Over the longer term, a chronic construction labour shortage and faster rates of immigration will continue to put upward pressure on the cost of housing (whether to rent or own). 

This prediction is also supported by the CMHC, in great detail, in their report: Canada’s Housing Supply Shortage: Restoring affordability by 2030

In that report, the CMHC’s economists note that

“Ontario is the only province where there are more projected households than forecasted housing starts through to 2030… which will only make prices rise and erode affordability.”

“Labour capacity problems are most acute in Ontario, the province with the largest population and the highest price pressures.”

"Ontario, will have to double the number of starts it can produce under the best-case scenario to reach our 2030 affordability supply target"

Note that CMHC’s forecasts were based on provincial population projections that were made before the federal government increased its immigration targets from 250,000/year to 500,000/year. As such, it stands to reason that the shortage will be more severe than CMHC predicted. 

Appreciation predictions for multi-unit residential properties

QUESTION: Will multifamily prices in Ottawa continue to rise?

ANSWER: Prices are falling from the peak they reached at the end of the ultra-low interest era. However, rising rents are buttressing prices. Longer term, a chronic housing undersupply issue is expected to further raise rents, and consequently, multi-family property prices.


As noted in the previous section. Rising interest rates will put some pressure on prices. The ultimate effect of that pressure will take some time to overcome recency bias. However, over the longer term, strong tailwinds will likely push rents, and consequently, prices, higher:

  1. Higher interest rates will keep would-have-been buyers in the rental market. 
  2. Massively accelerated immigration (from 200,000/year to 500,000/year). 
  3. Supply bottleneck engendered by a chronic construction-labour shortage (which immigration policy does not adequately address). 

Light Rail will Affect Income Property Values

QUESTION: Will properties near the LRT appreciate faster?

ANSWER: The creation of the light rail lines is expected to push the price of residential real estate near LRT stations up by 15%-30%.


OC Transpo has reorganized its bus routes so that the LRT forms the new backbone of the transportation network. As such, transit riders living near LRT stations will enjoy shorter commutes. That additional convenience will positively affect property values near the LRT stations.

Map of the Trillium Line, Confederation Line Phase 1, and Confederation Line Phase 2
The City’s expansion of the LRT will favourably affect real estate prices near the new, and existing, stations.

The LRT economic impact study commissioned by the City predicted a value increase of 15%-30% for properties within 600 meters of the LRT stations, and a lesser uplift as far out as 1200 meters from the stations.

Table showing that the LRT will probably raise the value of residential and commercial real estate in Ottawa by 19.6%
Ottawa’s LRT is projected to have a strong uplifting effect on the value of real estate situated within walking distance of a train station. Source: CPCS Economic Impact Assessment Review

According to the CPCS study, commercial real estate is expected to appreciate more than residential real estate. As such, at the neighbourhood level, land appreciation will largely be a function of the mix of uses near the station, with the greatest uplift occurring in areas with a greater proportion of commercial real estate.  

 Histogram showing increases in real estate prices around Ottawa’s various LRT stations.
Ottawa’s real estate investors can expect a 15%-30% increase in the land value of their rental properties near LRT stations.
Source: CPCS Economic Impact Assessment Review

Although the study doesn’t speak to the effect proximity to the LRT stations will have on the values of multi-family rental properties in particular, the number of planned rental apartments near existing and future LRT stations is telling. 

  • 633 rentals at Rideau Station.
  • 1300 rentals at Bayview Station.
  • 745 rentals at Gladstone Station
  • 500 rentals at Bayshore Station.  
  • 240 rentals at New Orchard Station.
  • 132 rentals at Cleary Station.
  • 2400-2700 condominium and 1000 rental apartments at Tunney’s Pasture.
  • 191 rentals at Lees.
  • 840 rentals at Blair
  • 4000 condos at Trim Road.

Those are in addition to more recently considered projects at the St.Laurent and Tremblay stations. Many of the biggest players are placing big bets that strongly suggest proximity to the LRT will positively affect the value of multifamily rental property. 

The new supply of rental units is unlikely to create a supply glut and reverse the downward trend we’ve seen in vacancy rates. Consider that an additional 8300 renters move to Ottawa each year, nearly 50% more than the combined total of all of the aforementioned units. 

That value boost created by the new LRT lines is expected to be realized over a number of years (the exact number has not been estimated), so there’s still an opportunity to benefit from accelerated appreciation. That said, if you’re a highly speculative investor who likes to buy well ahead of the crowd, you may find some value in this map of the City’s vision for the LRT around 2031. 

Map of the City’s ultimate plan for Ottawa’s LRT network.
Developers have bought, or optioned, most  large plots near the red, and blue, lines. Speculative real estate investors with distant planning horizons may wish to look at the ‘Conceptual Future Transit Corridors’.

Salvation Army relocation will affect property values

QUESTION: Will the new shelter on Montreal Road harm property values?

ANSWER: It probably will. All of the evidence suggests that the planned shelter will put downward pressure on prices near the shelter. The effect will be most pronounced within 400m of the shelter.


The Salvation Army has announced plans to relocate its shelter from George Street in the Market to Montreal Road in Vanier. In this section we consider what research and reason say about how it may affect property values. 

There has been little research on the effect of shelters on property values. That said, the research that has been conducted paints a consistent picture: 

  • In low-income high-crime neighbourhoods: the addition of supportive housing does not harm values and may have a small uplifting effect. (Note: supportive housing is intended to help people become self-sufficient.)
  • In high-income low-crime neighbourhoods: the presence of a homeless shelter does adversely affect values (Note: homeless shelters are intended to give people a place to sleep for a night). 

Those observations make sense. When an organization builds homeless accommodations in badly disadvantaged neighbourhoods those accommodations are more likely to be serving badly disadvantaged people who live there. If the accommodations help those people improve their circumstances, then the socioeconomic landscape of the neighbourhood should improve as well. Moreover, even if those accomodations were to attract homeless people to the neighbourhood, the effect of those new residents on the socio economic landscape of the already badly-disadvantaged neighbourhood would be less pronounced than it would be if accomodations were built in a wealthy neighbourhood and attracted homeless residents to that wealthy neighbourhood. 

Given the lack of research on the effect of homeless shelters on property values, reasoning with more thorough research may yield a clearer picture. 

∴ The creation of a shelter dampens appreciation.

  • The increase in theft caused by the creation of a shelter is most pronounced within 400m of the shelter.  

∴ The dampening effect on appreciation caused by the creation of a shelter is likely most pronounced within 400m of the shelter.

However, the Montreal Road shelter will not be like the other shelters: First, use of the shelter is contingent on sobriety and abstinence. 

CAD rendering of the Salvation Army’s Planned Shelter on Vanier’s Montreal Road.
The existing evidence suggests that the shelter may harm the value of some real estate investments in the neighbourhood. However, novel design features may mitigate this effect.

Second, the residential parts of the facility exit into a courtyard that is designed to be a more pleasant place for clients to ‘be’ during the day. Additionally, the distance between the courtyard and Montreal Road is intended to make the courtyard a more convenient place for residents to ‘be’. Those design features are intended to encourage clients to loiter in the courtyard rather than along the street.

CAD rendering of the Courtyard in the Salvation Army’s Planned Shelter on Vanier’s Montreal Road.
Clients can easily access this courtyard but must walk a long distance to reach a Montreal Road egress. The courtyard will improve the client’s experience and may protect nearby real estate values.

Optimists may contend that the combined effects of the courtyard and the Salvation Army’s abstinence policy will mitigate the Shelter’s effect on property values. 

Will Ontario’s Bill 23 affect values in Ottawa?

Bill 23, titled The More Homes Built Faster Act is the backbone of the Ontario Government’s plan to address the province’s chronic undersupply of houses. The bill aims to encourage industry to provide 1,500,000 housing units within the next decade. To that end the bill amends almost every act connected to development:

  • the New Home Construction Licensing Act,
  • the Planning Act,
  • the Development Charges Act,
  • the Ontario Heritage Act,
  • the Municipal Act,
  • the Conservation Authorities Act, and
  • the Ontario Land Tribunal Act. 

The most notable changes include

  • Allowing, as of right, up to 3 units on lots zoned for single family homes: Bill 23 would permit both a basement apartment and a garden suite; currently Ottawa by-laws allow only one of the two.
  • Site plan control now required only on projects with 10 units or more: previously, projects with more than three or six units (inside, and outside, the Greenbelt - respectively) were required to proceed through the costly site plan control process, which often added a few hundred thousand to the project’s costs and delayed construction by eighteen months or longer. The economies of scale needed to offset the additional cost effectively precluded the development of many otherwise viable mid-size projects. 
  • Prohibiting third parties from appealing to the Land and Planning Tribunal: going forward, only the developer and municipality will be permitted to appeal decisions on development applications. Previously, anyone (but typically, neighbours and community associations) were able to do so without cost. 
  • Properties protected from heritage designation once development applications are filed: previously, municipalities could, and often would, apply to have a property heritage designate in response to (or, perhaps more accurately, in reaction to) the filing of development applications - and thereby preventing redevelopment. Bill 23 prohibits reactive applications for heritage designation. 
  • More density along major transit corridors: Ottawa’s new official plan called for greater density near transit (and even went as far as implementing density minimums in areas within walking distance to the LRT). Bill 23 further increases the as-of-right density limits along major transit corridors, with the largest increase being seen along bus transit corridors. 

So what difference will this make to values? 

Increase in land value along major bus transit corridors. The price per buildable square foot is arguably the most important metric for appraising the value of urban land. The price per buildable square foot is calculated by dividing the price of the land by the floor area of the largest building that can be built, as of right, on the land. For example, if the largest apartment I can build on a lot is 12 storeys tall and 10,000 SF per storey, then (assuming the storeys are all equally large) the buildable area is 120,000 SF. If the lot were purchased for $100/buildable SF, then the sale price would be $12,000,000. If the builder is willing to pay $100/buildable SF, and the tallest apartment permitted on the lot is now 16 storeys tall, then the value of the lot to the builder increases to $16,000,000. Of course, there are multiple sellers, so the market is competitive, which puts pressure on prices. As such, we shouldn’t expect to see prices rise in perfect proportion to the increase in buildable area. Nevertheless, the value to buyers is now greater, and so we should expect some kind of an increase in value. 

Decrease in value of smaller R3 zoned lots. R3 zoning permits up to 3 units on a lot (aside: it also allows for row houses where lot sizes are large enough to accommodate them). With up to 3 units now allowed on lots bearing the most common residential zoning (R1), the supply of lots that permit up to 3 units has likely grown by an order of magnitude. If this additional supply has an effect on values, it will be to put pressure on the value of previously scarcer lots where 3 units were permitted as of right. 

Increase in value of R4 zoned lots. R4 zoned lots typically restrict height to 4 stories, but otherwise don’t restrict the number of units a developer may build on a lot so long as the proposed structure respects minimum room sizes (which apply to all dwellings) and set back requirements. As such, R4 lots are most appropriate for mid-sized developments. However, mid-sized developments do not present the kind of economies of scale needed to offset the time and expense of the site-plan control process. With developments of up to 10 units now exempt from that process, there are more viable options for the redevelopment of R4 lots. As such, we should expect demand for, and consequently, the value of, R4 lots to rise. 

Income Generated by Ottawa Rental Properties

The net income generated by rental property in Ottawa varies by neighbourhood. This is not just a consequence of differences in rents paid by tenants, but also a consequence of differences in tenant turnover, vacancies, and delinquencies. In this section, we look at city, and neighbourhood, level data for those four factors and consider its effects on the productivity of our city’s income property 

Rent differences among neighbourhoods

QUESTION: How much is rent in Ottawa?

ANSWER: The median rent for bachelors, one-bedrooms, two-bedrooms, and three-bedrooms, is $1550, $1875, and $2195, and $2250, respectively. Rent varies substantially among neighbourhoods and within neighbourhoods.


Median rent for 2-bedroom apartments is graphed below. Differences within each neighbourhood are available in the articles about those neighbourhoods (for links, see the neighbourhood summary section in this article). There is significant location-dependant variation within neighbourhoods .For example, rent for a two bedroom apartment in the east of Sandyhill is approximately $400 more than rent for a two bedroom apartment in the west of that neighbourhood. 

2022 Rents:

Bar graph comparing rents in various Ottawa neighbourhoods where rental properties predominate
Rents can vary significantly by neighbourhood.

Tenant turnover in Ottawa

QUESTION: What is the tenant turnover rate in Ottawa?

ANSWER: 26% of tenants move out once they’ve fulfilled the first 12 months of their lease. 64% of tenants have moved out of their apartment by the end of the fifth year of their lease.


Tenant turnover in Ottawa is higher than it is elsewhere in Canada and elsewhere in Ontario. For example, turnover is 10% higher in Ottawa than in Toronto. In our rent controlled province, turnover gives the landlord an opportunity to raise rents above the provincially stipulated annual increase. In that way, the additional turnover benefits our city’s income property owners. 

Within Ottawa, turnover varies greatly by neighbourhood. First year turnover ranges from 21% to 41%. Five year turnover ranges from  56% to 85%. 

Stacked bar graph comparing tenant turnover rates across Canada and within Ottawa
 Tenant turnover is highest where  younger people comprise a larger share of renters. 

Vacancy rate in Ottawa

QUESTION: What is the vacancy rate in Ottawa?

ANSWER: The vacancy rate in Ottawa is 1.8% overall. However, Ottawa’s vacancy rate varies by neighbourhood from 0% to 5.6%.


QUESTION: What is the vacancy rate in Ottawa?

ANSWER: The vacancy rate in Ottawa is 1.8% overall. However, Ottawa’s vacancy rate varies by neighbourhood from 0% to 5.6%.


There are few vacancies in Ottawa. The vacancy rate for the city is currently estimated to be 1.7%, down significantly from its pandemic high of 3.8%.  

bar graph comparing vacancy rates in various ottawa neighbourhoods.
Vacancy rates will nearly halve in 2023 and will likely end the year close to where they were before the uptick in vacancies that occurred during the pandemic.

Tenant reliability

QUESTION: Do tenants in Ottawa pay their rent?

ANSWER: Yes. Tenants in Ottawa are, on average, more reliable than elsewhere in Canada.


QUESTION: Do tenants in Ottawa pay their rent?

ANSWER: Yes. Tenants in Ottawa are, on average, more reliable than elsewhere in Canada.


In so much as credit scores indicate reliability, the data suggest that tenants in Ottawa reliably pay their rent. The average TransUnion credit score in Ottawa is 759 (top 38% nationally). Credit scores across the city are high, regardless of the neighbourhood. The lowest credit scores are found in the city’s lowest income neighbourhoods, but are still relatively high. Consider the following graph, which compares Ottawa and its neighbourhoods to the national average.  

Stacked bar graph comparing vacancy rates in various ottawa neighbourhoods
 Credit scores in Ottawa are notably higher than the national average. Even Ottawa’s worst scoring neighbourhoods don’t depart much from the national average. P=Percentile. Score:Percentile correspondence curve (0.000452924*x^2)-(0.339985*x)+62.2324

Cap Rates of Income Properties in Ottawa

QUESTION: What is a good cap rate for a rental property in Ottawa?

ANSWER: Capitalization rates for class A rentals in Ottawa range from 4.0% to 4.75%. Cap rates for class B rentals range from 4.75% to 5.5%.


Once leased at market rents, the median capitalization rate for a small multi-family property in Ottawa is approximately 4.5%. However, that rate varies by neighbourhood and the quality of the structure. The values of residential property differ among neighbourhoods more than rent does. For that reason, differences in property prices do more to explain the difference between the cap rates of two neighbourhoods than differences in rents do. 

As such, we find substantially higher median cap rates in the least expensive neighbourhoods. Consider the capitalization rates for Ottawa overall in comparison to the rates for three of its lowest-income neighbourhoods (Vanier, Lowertown and Carlington). 

Stacked bar graph comparing capitalization rates in Ottawa in 2023
The lower rates include the standard deductions for maintenance, repairs, vacancy, and management. The higher rates assume the typical MLS assumptions: zero deductions for vacancy, management, capital reserves, maintenance, and repairs.  All figures calculated using triplexes and fourplexes representative of each neighbourhood. The figures on the left represent stabilized cap rates.
The figures on the right represent going in cap rates
Source: OREB, CMHC,
Stacked bar graph comparing capitalization rates of various building sizes in Ottawa in 2023
 The lower rates include the standard deductions for maintenance, repairs, vacancy, and management. The higher rates assume the typical MLS assumptions: zero deductions for vacancy, management, capital reserves, maintenance, and repairs. All figures calculated using triplexes and fourplexes representative of each neighbourhood. The figures on the left represent stabilized cap rates. The figures on the right represent going in cap rates
Source: OREB, CMHC,

A naive use of cap rates treats them as a measure of the promise of an investment property: the higher the cap rate the better the investment property. This use sees caps as a measure of income relative to the price of the property. That measure is useful for comparing the incomes of similar properties. However, when comparing dissimilar properties, the cap rate provides no insight beyond what is needed to calculate it (NOI and price). As such, a more sophisticated use of the metric would employ it in order to gain insights that aren’t directly represented in the income calculation or the purchase price. The cap rate provides the investor with insight into prevailing beliefs about the risk of an income property, the cost and proximity of the capital improvements required, the expected capital gain, and to a lesser extent, the liquidity of the asset.

Accordingly, it’s no surprise that cap rates in neighbourhoods with the highest perceived risk have higher cap rates (e.g. Vanier: 6.3%, Lowertown: 6.8%) than other rental neighbourhoods. Moreover, even within Lowertown, we find cap rates are highest near Rideau street where crime (and consequently, perceived risk) is highest and the potential for capital gains is lowest. 

How to Find Investment Properties in Ottawa

QUESTION: How can I find good income properties for sale?

ANSWER: First, ensure your expectations are aligned with the market. Then go talk to the owners of the properties that have caught your eye. Alternatively, contract an agent who will reach out to owners for you and who has a bank of investors in his contact list.


You’ve looked for months and you haven’t found a rental property that meets your criteria? You’re not alone. In fact, your condition is common. The good news is that it’s easily diagnosed and treated. Odds are that you’re facing one, or more, of three problems.

  1. you’re looking at the wrong investment properties, 
  2. you’re looking in the wrong place, or
  3. you’re looking for something that doesn’t exist. 

Now let’s figure out what problem you’re running into and how we can treat it. By the time we’re done, we’ll have saved you from wasting your time looking for a sasquatch or we’ll have you on your way to finding the income property you haven’t been able to find yet. 

Step 1: Forget your goals. Set your parameters.

Almost all of my clients come to me with a goal they can clearly articulate. 

Example goal: I want a 5% cap rate.

Example goal: I want positive cash flow.

Example goal: I want a 6% IRR. 

Many of my clients first called me when they hadn’t succeeded in finding an investment property that met a single specified performance threshold. These clients had each used single measures to define their respective goals. Yet, in almost all of those cases, there were opportunities listed on the MLS that surpassed the stated performance thresholds. Many of these clients had seen those opportunities and found them unsatisfactory. Let’s call any opportunity that meets an investor’s stated goal but doesn’t appeal to that investor a ‘false-positive’. It passess the client’s test, but it isn’t actually what the client is looking for.

Example false-positive: 10% cap rate on a dilapidated rooming house in Lowertown. 

The dilapidated rooming house provides a cap rate that surpasses 5%, would easily provide a 6% IRR, and would certainly provide positive cash flow. Yet, few people who come to me with any of those search criteria would not opt to invest in the rooming house. What does that tell us? It tells us that the single criterion doesn’t fully capture the investor’s goal. It also tells us that the investor’s goal is probably characterized by more than one criterion. In fact, if we step back, the investor’s unstated goal probably looks something like this.

Example fully-specified goal: Purchase the rental property that provides the most cash flow among those that are likely to come up during the next six months, are well maintained, cost between $700,000 and $800,000, capitalize at a rate of at least 4.5%/year, built after 1960, and provide at least basic functional space to residents of a neighbourhood populated by at least lower-middle income earners where property values are expected to appreciate at a real annual rate of 2.5% or more. 

That example has two types of parameters: an objective and a set of constraints. 

Maximum cash flowWell maintained
More than one unit
Cap rate over 4.5%
Less than 60 years old
Functional space or better
At least lower-middle income neighbourhood
Projected appreciation of at least 2.5%
Better option within next 6 months is unlikely
Well maintained

The objective is the part we want to maximize - and it’s the only part we evaluate on a sliding scale. The constraints are simple pass/fail criteria. 

Use this method to judge opportunities by looking at the set of rental properties that have come up during previous six month periods (or however long your search period is). You’ll need to make the necessary adjustments for prices, rent, expenses, etc. in order to ensure you’re comparing apples to apples. 

By using previous sales records we can see how many opportunities came to market during  previous six-month periods that would have satisfied your constraints. Then you only need to index the cap rates of the satisfactory opportunities to the present in order to extrapolate the highest cap rate you should expect to see within the next six months. 

Step 2: Know the market’s trade-off ratios

In the market for traditional investments (stocks, bonds, etc.) risk and reward correlate. Investment real estate is no different.  We’ve seen that in the cap rate table, that as we move up the property class ladder toward lower-risk investment properties, the cap rates decline. 

Class A
(less risk)
(less return)
Class B(more risk)4.75%
(more return)

The same applies to the other kinds of returns that investment property generates. Take appreciation for example. If the risk level stays the same and the expected appreciation increases, then the cap rate will decrease. 
There’s a useful idea from portfolio management theory called the efficient frontier.  While the efficient frontier is usually discussed in the context of securities investing, it’s useful here for illustrating the relationship between the risks presented by investment real estate (tenant quality, vacancy variability, delinquency rate, etc.) and the rewards promised by investment real estate (present value of expected income relative to purchase price and expected appreciation).

We want to limit our search for an investment property to the properties along the efficient frontier. If we look to the right of the frontier, we find sub-par opportunities. If we look to the left of the curve, we waste time searching for a sasquatch - something that doesn’t exist and isn’t worth spending a lifetime hoping and searching for it. 

Step 3: Know your trade-off ratios

Just like the market has trade offs, you probably have your own set of trade offs you’re willing to make. For example, you might say that you’d trade one percentage point of expected appreciation for one percentage point of cap rate, but only so long as the investment would be cash flow positive even after trading the point of capitalization for the point of appreciation. That description gives us a line (or a curve) that is a graph of your trade-off function. But let’s continue with the risk:reward graph we’ve used so far. 

Setting out your trade-off function will help you define your search space. If we were to plot all of the rental properties for sale on the graph according to their risk and reward, your search space would include all, and only, the rental properties that were plotted where your trade-off line (or trade off function) and the efficient frontier connect. 

Knowing your trade-off function will also enable you to judge whether an investment in one income property would be superior to an investment in a different one. The trade-off function enables you to do this by enabling the elimination of difference in one dimension by expressing the value of that adjustment in the other dimension. 

For example, suppose our tradeoff function trades off 1 unit of return for every half-unit of risk, and that we’re considering two rental properties. The first rental property offers 4 units of return and presents 0.5 units of risk. Given our trade off function, the first property would be just as good as a property that offers 3 units of return and 0 units of risk. The second rental property offers 6 units of return and presents 1.0 units of risk, which is equivalent to 4 units of return and 0 units of risk. Now that we have zero’d out the risk profiles of the properties, we can make our decision in terms of risk-adjusted return. 4 units of risk-adjusted return is greater than 3, so the second property is the better option. 

Now can you have more than one trade-off function? Sure. But it’s almost always unnecessary. You only need to make things as complicated as they need to be to make the best decision. When making a decision about which local income property to invest in, one trade off function will more than suffice. 

Knowing what your trade-off curve looks like will enable you to compare dissimilar income properties. 

Step 4: Figure out where you need to look

So now we’ve clearly defined our search criteria and we’ve checked the data to ensure our criteria are realistic. (Again, if there’s no reasonable chance that you’ll find what you’re looking for, you risk spending precious months, or even years, searching for something that is unlikely to exist. In the meantime, you lose out on appreciation of your investment property that could have made you wealthier.). Now how do we find the most appropriate investment?

As a general rule, the larger the property the less publicly its sale will be advertised. Mid-sized (12-50 unit) purpose built multi-family properties are only occasionally listed for sale. The vast majority of them are sold directly between parties. Large multifamilies are almost never listed. 

Career real estate investors who spend the majority of their time managing their portfolio are able to rely on their network and reputation to produce a stream of leads. Almost all others rely on their network of professionals in Ottawa’s investment real estate industry (an agent or broker). The alternative is to build a network and regularly communicate with those in it in order to remain top of mind. If networking is too time consuming, calling rental property owners directly may prove fruitful. 

Step 5: Go and find your property

Networking is an effective way to meet other real estate investors. The effort will require more than just shaking hands. You’ll want to volunteer with your networking groups in order to get to know its members well.

Accomplished investors often lend their expertise and influence to local foundations; participation in these organizations may present opportunities to meet other investors. 

For large properties, a number of members of Ottawa’ Building Owners and Managers Association are multi-family property owners (although the organization is focused on commercial real estate).

Smaller rental properties are listed more often. However, there’s an enormous contingent of small multi-family investors who would be willing to sell if a reasonable offer were to come to them, but who don't want to be bothered with the hassle of months of showings and tenant interruptions. Networking can be a useful way to find the owners of these rental properties. Groups like the Ottawa Real Estate Investors Organization are attended by real estate investors who own smaller residential income properties. 

Cold calling can substitute for in-person networking if you’re short on time. The landlord’s phone number is often advertised somewhere around the building. If not, tenants may provide it to you. Alternatively, you can purchase a parcel registry from Teraview (approximately $33). Often, rental properties are owned by a numbered company. The identity of the beneficial owner of the numbered company can be purchased for $8.00 from the Canadian, or the Ontarian, corporate registrar (depending on whether the company is registered federally or provincially). Bear in mind that most owners will not be contemplating selling when you first call. You will need to call a number of owners and follow up as appropriate. Moreover, their motivation to sell may not be especially high. Reaching out to owners may be a useful way to find high quality rental properties, but it’s not a great tool for finding exceptional discounts. 

Listings are the most effective method of finding smaller income properties. You can browse listings on

Screenshot of Multifamily Investment Properties in Ottawa listed for sale on often has a long list of smaller multi-unit investment properties for sale in Ottawa.

Alternatively, your agent can email you new listings automatically. There’s a delay (up to 24 hours) before listings are published on So having an agent send you listings automatically can get the best opportunities to your inbox faster. 

To find discount properties, cast a very wide net. Landlords in Ottawa are rarely so motivated that they’ll offer a fire sale price in order to sell a property a few weeks faster. That said, modest discounts are occasionally offered by motivated rental property owners. 

We see discounted investment property more often, but still infrequently, when it’s sold as part of an estate sale. In those cases, the discount is typically in the range of 2-5%. 

Motivated sellers will want a quick closing, so you should be pre-approved for financing and will need the cash for the down payment (and preferably the entire purchase) available immediately.

Investors looking to buy rental property from motivated sellers should consider adjusting their search strategy to account for the rarity of highly motivated sellers. These investors should not plan to encounter a highly motivated seller who is selling a rental property that satisfies numerous criteria. In most cases, the bargain-focused investor should relax her search criteria so that she can find her deal.

Alternatively, instead of relaxing her criteria. The bargain-focused real estate investor could opt to spend substantially more time searching for her next investment. However, that additional search-time comes at the cost of lost income and appreciation.

Given the long-term nature of income generating real estate investments, in most cases, it’s advisable to forgo the small discount and invest in something that fits your requirements. If the property you want happens to have been listed by a highly motivated seller, then consider it a bonus, but not a necessity. 

Contract someone to do the legwork for you.. A good investment real estate agent does more than check listings. He should be calling his network and other investment property owners on behalf of his client - especially for large acquisitions. 

Decisive real estate investors should know what their agent is doing for them so they can ensure that the right steps are being taken to find their next investment property before appreciation makes the investment more expensive than it needs to be. For this reason, I log the work I’m doing for clients and send it to them weekly. 


John Castle


John is a data driven real estate agent and advisor with an accounting and business background.

John has provided expert Opinion to Forbes, Yahoo! Finance, the Ottawa Citizen, and other publications.


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