Investing in Secondary Markets — Where Are Ontario’s Hidden Gems?

As home prices and competition soar in Toronto, Hamilton, and Ottawa, real estate investors are increasingly looking to secondary markets—mid-sized cities and towns across Ontario that offer stronger cash flow, less bidding pressure, and serious long-term upside.

These hidden gems might not get the headlines, but they’re attracting smart investors who understand that sustainable returns come from smart positioning, not just big-city hype.

Why Secondary Markets Matter More Than Ever

The average home price in Toronto hovers well above $1 million, and even outer suburbs like Mississauga and Brampton aren’t far behind. For many investors, this makes cash flow nearly impossible—especially when factoring in rising interest rates and stress test requirements.

Secondary markets offer:

• Lower entry prices, which reduce down payment requirements and debt load

• Higher rental yields, often 1.5–2x what you’d find in the GTA

• More motivated sellers, creating room for negotiation

• Growing demand, as renters and buyers get priced out of urban cores

And with Ontario’s increasing investment in regional transit, broadband access, and infrastructure, these markets are becoming more livable and connected than ever before.

Top Ontario Markets for 2025 (and Why They Stand Out)

1, Peterborough

Just 90 minutes from Toronto, Peterborough offers strong demand thanks to Trent University and Fleming College. A growing tech and healthcare scene and a revitalized downtown make it a promising play.

2, Windsor

This border city continues to benefit from its manufacturing base and access to Detroit. With rental properties under $400K and cap rates above 6%, it’s one of Ontario’s best-kept secrets.

3, Kingston

Home to Queen’s University and multiple hospitals, Kingston has a consistent tenant base. It also sees seasonal rental demand, making it ideal for both long-term and short-term strategies.

4, North Bay

Often overlooked, North Bay offers affordable multi-unit buildings and a loyal renter base, supported by healthcare, education, and military employment. Investors can achieve solid cash flow with less upfront capital.

What Makes a Secondary Market Investable?

When assessing smaller markets, look for:

• Population growth: Even modest growth shows long-term sustainability

• Local employment hubs: Universities, hospitals, and government jobs are sticky and reliable

• Vacancy rates: Look for towns with <3% vacancy to ensure tenant demand

• Infrastructure investment: New highways, transit lines, or downtown revitalization projects signal future growth

Also consider whether the municipality is landlord-friendly, has streamlined zoning and permits, and offers incentives for development or renovation.

Risks to Watch For

While secondary markets have big upsides, they aren’t without risks:

• Market depth: Fewer tenants or buyers can make turnover slower

• Property management: Options may be limited—especially for smaller buildings

• Appraisal gaps: Smaller towns may not have comps to support aggressive valuations

Due diligence and a conservative underwriting approach are essential.

Final Thoughts

Ontario’s secondary markets represent one of the best opportunities for real estate investors in 2025. With lower costs, higher yields, and strong fundamentals, they offer a path to cash flow and appreciation—without the price tag of the GTA.

At Greenell Capital, we help investors explore these hidden gems with detailed market analysis, financing guidance, and local insights that reduce risk and maximize returns.