Mastering International Real Estate Investment: Non-Resident’s Guide to Toronto’s Pre-Construction Condo Market

Canada is a growing country full of opportunities. And as it stands, investors can find excellent opportunities in the housing market, especially in the long term. As the value of real estate appreciates over time and the equity portion of investments grows – long-term investors usually return to the bank and refinance and buy more real estate to grow their portfolios.

More and more investors worldwide participated in Toronto’s real estate boom and bought pre-construction condos a few years back that are now being delivered and closed on. Many international investors have funds in a currency or country that’s considered risky and want to diversify and buy into the Canadian market to diversify.

Many rules and regulations exist, and investors must abide by them when investing in real estate as international / non-resident investors.

One of those rules is the tax withholding on rental income investors receive from renters.

CRA has provided clear guidelines for non-residents of Canada receiving rental income from investment properties.

Expertise in Non-Resident Property Acquisitions

The complexities of real estate investing can be intimidating and stressful to international investors. Investors must use experienced and reputable professionals to ensure proper processes are followed. This includes the real estate agent/broker you are working with, the mortgage broker, the lawyer required for closing, and the property management company. The right professionals will assist with closing, preparing your condo for rent, finding great tenants, and ensuring the day-to-day activities of managing rental properties.

Pre-Construction Condo Investments from Abroad (How to close on your purchase remotely)

Pre-construction condo investment usually occurs early when a builder puts together a plan to build a project. Investors buy properties based on the plans and wait for the builder to complete the project. Once the project is built, investors can close on their units within the project and register their property. This usually takes around three to five years on average when you first buy as an investor and until you close on the property.

There are many advantages to this type of investment. The buyer would have secured an investment with a 5% down payment usually and has time to raise the finances for subsequent installments and several years before they have to close on the final purchase, usually with the help of a mortgage.

There are many incentives connected to purchasing a pre-constructed condo. The investor can benefit from price increases over the holding period while construction is completed. VIPs and early investors usually receive additional benefits such as parking, locker, and certain upgrades to the finishes.

Non-resident and international real estate investors in Toronto must find an agent in the country to represent them with the purchase and subsequent steps in rental and management. This can be done in most instances online and remotely – the investors don’t need to be in Toronto to complete the various transactions.

The Essentials of a Pre-Delivery Inspection (PDI)

A pre-delivery inspection refers to an appointment that will be completed by the agent or the homeowner themselves to evaluate and ensure the condo is in a good/completed state and that any upgrades and finishes that the owner requested have been delivered. 

The homeowner will use the time to identify incomplete work, issues, or missing products. A walkthrough of the condo will allow the investor to spectate and raise any concerns or disagreements with the condo. 

Investors need to use this time wisely. They will have to flush every toilet, open all taps and doors and ensure that the condo is according to the original agreement. Once this is done, no adjustments can usually be made after the fact, and the investor will have to pay for any fixes that need to be done.

Given the number of PDIs we do on behalf of investors, we know what to look for and how to communicate deficiencies to builders so that we ensure your investment is well protected from the start. 

Securing Your Investment With the Right Insurance Coverage

Investors always want to protect their real estate investment, and having the right landlord insurance coverage is necessary.

Landlord Insurance in Your Investment Journey

Landlord insurance protects the landlord when the property gets damaged or an individual is hurt. This will protect the landlord against any disastrous or other forms of problems that might occur. As with non-residential owners, the insurance will safeguard you as a landlord and your investment.

Before we onboard new clients, we ask for proof of landlord insurance. Some informational investors find it difficult to secure insurance as they are non-residents of Canada. We managed to mass negotiate an umbrella/blanket insurance on behalf of our clients and extend it to them as an extra perk. The rate and coverage of this umbrella/blanket insurance are very competitive and an added benefit to our clients.

Comprehensive Preparation for a Smooth Rental Experience

Tenants are a dime a dozen in Toronto’s housing shortage, but great tenants are uncommon. When you maintain a property well, it will attract the right tenants. You always want to ensure the property is rental-ready and the health and safety of the tenants before listing a property for rental. A thorough screening and due diligence are crucial to your investment success. 

Cultivating a Successful Landlord-Tenant Relationship

The critical part of renting a property or condo is the relationship between the tenant and the landlord. Finding great tenants is one thing; maintaining the relationship and ensuring the tenants enjoy their new home is another aspect of the job of a successful landlord.

Finding and Retaining High-Quality Tenants – The Most Crucial Aspect of Rental Properties

A few factors will impact the type of tenant the property will attract. Landlords need to be attentive to the tenants’ needs. The property must be maintained throughout the leasing period. The owner should not aim to fix problems when the lease is completed but rather to fix the issues as they occur. With this in mind, the landlords must react reasonably when the tenants request assistance. 

Implementing Robust Lease Agreement (Ontario Standard Lease)

As of 2018, Ontario has created a standard lease to accommodate tenants that want to rent property from a landlord. 

The Buttonwood Advantage: Seamless Property Management

Buttonwood is dedicated to helping real estate investors build wealth over time in the Greater Toronto Area. Both residents and local investors benefit from our services. We also cater to international real estate investors and non-residents, as Toronto is one of the most ethnically diverse cities in the world and is very transient.

We offer a full-service real estate solution to real estate investors to include: Buying/selling, preparing for rental, finding great tenants, collecting rent, complete tax withholding on rental income as your agent in the country if necessary, managing the day-to-day to include maintenance, repairs, and emergencies. Reporting and providing you with monthly statements and copies of recipes.

Our reputation is spotless because we care about relationships first and foremost, followed by our continuous pursuit of learning and development, and for us, financials is a far third priority. This is why we always do the right things by all parties involved (landlords, tenants, Tradespeople, and our staff) and ensure everyone is treated right. 

Streamlining Day-to-Day Operations: The Buttonwood Guarantee

One of Buttonwood’s services is to run the day-to-day operations for the non-resident. This means that all the maintenance, repairs, emergencies, transactions, filing of documents, and repairs that might occur will be dealt with professionally on your behalf.

The non-resident can enjoy the benefits of rental income without the added stress of dealing with the tenants. 

Simplified Taxation for International Investors: Understanding NR4 and NR6 Forms

Buttonwood has the expertise and knowledge to deal with your tax obligations as a non-resident and file the necessary documents for tax withholding on rental income. The team will coordinate the required processes and documentation requirements on behalf of the owners.


Once an NR6 is completed and submitted to CRA, itemizing the expenses an investor incurs on their property, CRA will review and come back with feedback or approval to withhold 25% of expected net rent income rather than gross rent.  

This approach usually reduces the ongoing monthly tax withholding amount as it accounts for the expenses. CRA requires you to file yearly taxes by June 30.

Remittance based on Gross Rent

Another option is to remit to CRA 25% of gross rental income, and once taxes have been filed, an adjustment will be made based on 25% of net rental income (CRA will either reimburse overpayment or ask for the balance to be paid off) 

Both approaches work – what we have observed from our client base is that most international investors like to go the gross route with the 25% on gross as it allows them a two-year period to file taxes. When they do, they usually get a check back from CRA after accounting for their expenses.


Despite which approach of remittance has been followed, after year-end, an NR4 Statement of Amounts Paid or Credited to Non-Residents of Canada will be issued by the agent (i.e. property management) to the non-resident outlining the amount of payment made to CRA throughout the year. This form is needed for the non-resident to file their taxes.

Buttonwood Online Portal for Transparent Reporting

Buttonwood will create a portal for every client (landlord and tenant) to find essential documents and information. This will allow the landlord to know precisely what is happening at all times. 

Convenient Access to Financial Statements and Receipts

All financial statements and receipts will be available online on your portal as a client. This will significantly benefit the landlord as they will have full access.

A Year-End Snapshot with One Click: Empowering Your Accountant

At year-end, with a press of a button, you can get all this information. The information can be shared with your accountant for tax filing.


What Does Buttonwood’s Service Cover in Managing Pre-Construction Condos for International Investors?

The Buttonwood team will coordinate with the builder on your behalf to ensure the PDI process goes smoothly; we will coordinate with your lawyer to pick up keys; we will coordinate with you and/or help you acquire insurance coverage; we will prepare the condo for rent, i.e., secure window coverings for example, we will advertise and rent your property for suitable tenants and then maintain your investment.

How Does Buttonwood Assist with Landlord Insurance, and What Benefits Does It Provide?

We always ask for landlord insurance coverage proof before onboarding new clients. Over the years, we have seen international non-resident real estate investors struggle with securing landlord insurance as non-resident investors. We successfully secured blanket insurance that can cover our clients for landlord insurance and offer it to our clients as an extra advantage, as the cost and liability coverage tends to be much better than what investors can secure by themselves.

What Is Buttonwood’s Process for Finding Quality Tenants for My Property?

This is our pride and joy and one of the dimensions of our business we are most proud of. We say this because it’s an aspect of the business that adds the most value to our clients. We have been in business for over 12 years and have executed thousands of leases, and to date, we only had four evictions for non-payment of rent. Two of those evictions were for properties we didn’t place the tenant ourselves. This track record is uncommon and unique, and our proprietary tenant screening and thorough due diligence we complete and value to the landlord’s bottom line on their investment returns.

How Does Buttonwood’s Online Portal Work, and How Can It Benefit Me as an International Investor?

As a client, we know that you trust us with a fairly significant investment, and we ensure transparency throughout the process. Your dedicated online portal will show statements and copies of receipts for any work we complete on your behalf, have your best interest in mind, and do not have hidden fees and/or markups on maintenance or repairs.

How Does Buttonwood Handle Tax Withholdings on Rental Income, Specifically for the NR4 and NR6 Forms?

We have deep expertise in this space, given the international investors we cater to. We coordinate to complete the necessary documents on your behalf as a client to ensure the CRA obligations are met. We ensure the tax withholding on rental income is done correctly on your behalf. This includes the NR4 and the NR6 taxation forms, depending on our approach. 

Buttonwood: The Key to Unlock Your International Real Estate Success

At Buttonwood, we take pride in assisting local and international real estate investors with their property investments in Toronto. The team will assist property owners/landlords in completing all the legal documents and leases. The team will find a tenant and manage the property and the relationship with the tenants on the landlord’s behalf, allowing the landlords to continue living and working abroad while their investments are managed.

Sabine Ghali
Sabine Ghali
Helping real estate investors build wealth over time

Sabine Ghali, Managing Director at Buttonwood Property Management, Award Winning Real Estate Broker and an Entrepreneur at heart. Sabine is on a mission to help investors create real estate wealth over time in the Greater Toronto Area. Sabine is published in a number of media outlets, including Toronto Star, The Globe and Mail, Toronto Sun, Entrepreneur, Forbes, and Gulf News, among many others.