As Toronto’s housing affordability challenges grow, Toronto garden suite investment opportunities are on the rise, particularly for property owners looking to maximize value and rental income. Garden suites (aka backyard suites) are detached, self-contained secondary dwellings built in rear yards. These units offer flexible living options, extra income, and increased property value. In 2025, strategic homebuyers and investors should zero in on promising neighborhoods that combine local demand, favorable zoning, and strong garden suite ROI in Toronto.
In this blog, we will explore the top 4 Toronto neighborhoods for lucrative Garden Suite Investments in 2025.
1. East York: Mid‑Market Appeal & High Rental Demand
East York is emerging as a top contender for Toronto garden suite investment for good reason. Property prices here tend to be lower than in the core, while transit—TTC lines and nearby subway extensions—remain solid. According to a January guide, a typical garden suite in East York can fetch $2,500–$3,000/month, with build costs of $275,000–$350,000, translating into an annual gross income of $30,000–$36,000
Key highlights of East York:
- Great balance of affordability and accessibility
- Strong demand from urban professionals and young families
- Zoning rules support garden suites with minimal hassle
With a projected payback of 8–12 years, it’s essential for steady garden suite ROI in Toronto.
2. Scarborough: Bigger Lots, Broader Potential
Scarborough offers generous lot sizes—perfect for larger garden suites. Build costs range from $250,000–$400,000, and monthly rents hover around $2,200–$2,800.
Why Scarborough stands out:
- Configurable for 1–2 bedroom suites
- Proximity to transit expansion (e.g., Scarborough Subway Extension)
- Demand is growing among renters seeking affordability outside the downtown core
Its longer lot depths allow for creative home designs, making it a logical choice for Toronto garden suite investment with strong upside.
3. Etobicoke: Premium Rentals & Suburban Appeal
Etobicoke is poised for lucrative Toronto garden suite investment, blending suburban lifestyle with solid rental demand. Average garden suite rents reach $2,800–$3,500/month, while build costs come in between $300,000–$450,000
Investment strengths in Etobicoke include:
- Family-friendly community with established appeal
- Excellent highway connectivity and proximity to Pearson Airport
- Opportunity for premium returns due to desirable tenant demographics
With a projected 9–13 year payoff horizon, Etobicoke maintains its allure for garden home trends for Toronto investors.
4. Rockcliffe–Smythe: Up-and-Coming, Great Value
Rockcliffe–Smythe, located in northwest Toronto, offers untapped potential. As a predominantly single-family residential area with growing popularity—and Netflix-worthy green spaces—it presents lower entry prices with solid upside
Why it’s compelling:
- Great community vibe and new development interest
- Good lot sizes that support detached suites
- Less competition, yet rising demand from younger buyers
This neighborhood ranks high among the best neighborhoods for garden homes due to its affordability and growth trajectory.
Why These Are the Best Neighborhoods for Garden Homes
- Transit & amenity access — All four areas have strong public transit or highway links, making suites appealing to renters
- Lot suitability — Zoning in these neighborhoods supports detached secondary dwellings with proper site conditions
- Pricing vs. rent — Build costs stay moderate, while rents are sufficient to deliver attractive returns
- Rookie-friendly opportunities — East York and Scarborough offer less competitive markets, ideal for first-time investors
All four neighborhoods reflect current garden home trends in Toronto, catering to renters seeking affordability without compromising connectivity or quality.
Toronto Garden Suite Investment: Financials & Trends
Build & Regulatory Costs
In Toronto, constructing a garden suite averages $250–$450/ft², totaling $200,000–$400,000+, depending on size and specifications. Suites can be up to 600 ft² (plus optional basements). Permits and site prep may add $5,000–$10,000+.
Rental Income Potential
Rents vary based on location and design—reports show $2,200–$3,500+/month in suburbs, and up to $5,000–$7,000 in prime pockets. Based on build costs, net incomes range from 6–10% cap rates, making the garden suite ROI in Toronto very attractive.
Appreciation & Equity Boost
Beyond rental yields, a garden suite often increases your property’s market value by 20–30%. On a $1 million property, that’s an extra $200,000–$300,000 in equity.
Market Drivers & Trends
Toronto’s 2022 zoning update under the EHON initiative permits garden suites across most residential zones. As multi-generational living grows and housing shortages persist, garden home trends in Toronto reflect a fusion of new income channels and supportive regulation.
Maximizing Garden Suite ROI in 2025
- Pick the right neighborhood – The four highlighted areas balance costs, demand, and growth potential.
- Design wisely – 1–2 bedrooms, open-plan layout, parking, and green amenities boost appeal.
- Work with experienced teams – Ensure compliance and quality finishes for long-term value and tenant retention.
- Think long-term – In addition to rental yields, you’re building equity and future resale appeal.
Final Insights
Toronto garden suite investment in 2025 is ripe with potential. East York stands out for balanced costs and rental appeal; Scarborough offers lot space; Etobicoke garners higher-end rents, and Rockcliffe–Smythe gives emerging opportunity.
By understanding garden suite ROI Toronto, aligning with garden home trends Toronto, and tapping into the best neighborhoods for garden homes, investors can:
- Generate steady rental income
- Build significant equity with property value gains
- Participate in the shift toward flexible, multi-generational urban housing
Speak with designers, builders, and city-planning experts to assess lot suitability and maximize long-term benefits. With Toronto opening the door to ADUs city-wide, these four neighborhoods mark prime opportunity zones for garden suite growth.
FAQ
What is a garden suite, and how much does it cost in Toronto?
A garden suite is a detached, self-contained second dwelling in your backyard. In Toronto, typical costs range from CAD $200,000 to $400,000+, depending on size and finishes.
Which Toronto areas allow garden suite construction?
Garden suites are permitted in most Toronto residential zones following the 2022 EHON zoning bylaw. Neighborhoods like East York, Scarborough, Etobicoke, Rockcliffe–Smythe, and beyond qualify.
How much rental income can a garden suite generate?
Rental income varies by location and design; most suites yield CAD $2,200–$3,500/month, with premium suites reaching $5,000+/month depending on market demand.