Why More Investors Are Targeting Small Town Real Estate

March 2025

Real estate investment has long been a lucrative strategy for building wealth, but in recent years, more investors have shifted their focus from big cities to small towns. In Canada, this trend is gaining momentum as rising urban property prices push investors to explore new opportunities. Small-town real estate offers lower costs, growing demand, and potential for high returns, making them an attractive option for those looking to expand their portfolios. Understanding why this shift is happening and how small-town real estate is evolving can help investors make informed decisions.

Affordability Compared to Major Cities

One of the biggest drivers of this trend is affordability. Property prices have skyrocketed in major cities like Toronto, Vancouver, and Montreal, making it difficult for investors to enter the market. Small towns offer significantly lower property prices, allowing investors to purchase multiple properties for the same price as a single urban unit. Lower purchase costs also mean lower mortgage payments, which can improve cash flow and profitability.

Higher Rental Yields and Stronger Returns

With lower property prices comes the potential for higher rental yields. In small towns, rental demand often exceeds supply due to a limited number of available properties. This creates opportunities for investors to charge competitive rents while maintaining low operating costs. In contrast, urban rental markets tend to have higher vacancy rates and stricter rent control regulations, which can cut into profitability.

Small town real estate has the potential for higher rental yields.

Logistical Efficiency When Moving Investments

Investors relocating their business operations or properties to small towns must consider logistical efficiency. Moving real estate assets, managing renovations, and transitioning tenants require careful planning. It’s crucial to use your resources efficiently to minimize costs and ensure a smooth transition. Partnering with professional movers and leveraging local services can help optimize the moving process and keep investments on track.

Migration Trends Are Favoring Small Town Real Estate

As remote work becomes more common, Canadians are increasingly choosing to leave expensive cities in favor of smaller communities. The pandemic accelerated this trend, with many people prioritizing affordability, quality of life, and space over proximity to city centers. This shift in population is increasing the demand for housing in small towns, creating opportunities for investors to meet the growing need for rentals and resale properties.

Government Incentives and Lower Property Taxes

Many small towns in Canada offer incentives to attract new residents and businesses, which benefits investors. Some municipalities provide tax breaks, grants, or subsidies for homebuyers and developers, making it even more affordable to invest. Additionally, property taxes in small towns tend to be much lower than in major cities, helping investors maximize their returns.

Infrastructure Development and Economic Growth

Government investment in infrastructure is helping small towns become more desirable places to live. Improvements in public transportation, healthcare facilities, schools, and commercial spaces make these areas more attractive to new residents. Investors who enter these markets early can benefit from rising property values as small towns develop and expand their economies.

More Space and Appealing Lifestyle

The appeal of small-town living extends beyond affordability. Many Canadians are drawn to these areas for their lower crime rates, quieter environments, and access to outdoor recreation. Properties in these areas often come with larger lot sizes, providing tenants with more space for their families and personal interests. This lifestyle shift is further fueling demand for housing in small communities.

Fewer Regulatory Barriers

Large cities often have strict zoning laws, rent controls, and complex permitting processes that can create challenges for investors. In contrast, small towns typically have fewer regulatory barriers, making it easier to develop or renovate properties. Investors looking to build rental units, vacation homes, or multi-family properties can often navigate local requirements with greater ease.

Small towns typically have fewer regulatory barriers.

Short-Term Rentals and Tourism Potential

Many small towns in Canada are located near lakes, national parks, and other tourist destinations. This presents an opportunity for investors to tap into the short-term rental market. Platforms like Airbnb and Vrbo make it easier than ever to rent out properties on a short-term basis, providing an additional revenue stream. As domestic tourism remains strong, small-town investment properties can yield significant returns, particularly in high-demand vacation areas.

The Role of Professional Moving Services

Shifting investment focus to small towns may involve moving business operations, purchasing new properties, or managing tenant relocations. Investors looking for new markets with potential might want to explore the local news, real estate portals popular in the area, and moving-related forums. One such website is Coastal Van Lines, a trusted name in the industry known for efficient moving solutions. You can find useful insight about real estate market with the help of these resources and adjust your plan of action accordingly.

Rising Interest from Foreign Investors

Foreign investors are also recognizing the potential of small-town real estate in Canada. With stricter regulations and higher prices in major cities, international buyers are turning to smaller communities where they can purchase property at a fraction of the cost. This additional influx of capital is helping to drive up property values, making it an opportune time for local investors to get involved before prices rise even further.

Conclusion

The increasing investor interest in a small town real estate is driven by affordability, high rental yields, changing migration trends, and growing infrastructure investments. As more Canadians seek alternatives to expensive urban housing, small towns present a promising opportunity for long-term real estate investment. Investors who recognize the potential in these markets and strategically manage their resources can position themselves for success. By staying informed and leveraging expert support, real estate investors can make the most of this evolving trend in Canada’s housing market. As demand continues to rise and small communities flourish, the window of opportunity for investors to enter the market at competitive prices may soon narrow, making now the ideal time to act.

Please contact Broker Donna Bulika for advice on selling real estate in Toronto and to book your private consultation by filling out the form below or calling/texting at 416-797-6226, or emailing sold@donnabulika.com