Renovations or retrofits to an investment property that increase rents and/or decrease operating costs may also increase a property’s value. Cost and value, however, are not synonymous, and not all renovations are as profitable as one might expect.

The average cap rate in the GTA for the third quarter of 2015 (Q3’15) hit its lowest level in the last 30 years. Cap rate in Q3’15 stood at 3.75 per cent, down from 4.2 per cent in Q2’15 and down almost 50 per cent from the 6.3 per cent posted in Q3’10.