These four cities are among the best places to invest in a second property.

Purchasing a rental property can be a lot of work, but it can also be a highly lucrative investment. Whether you're looking for a vacation home for you and your family that could be rented out in the off-season or hoping to try your hand at being a landlord, buying a rental property is a smart way to earn a little extra cash over time. 

Before taking on this financial obligation, it's important to consider which areas in Canada have low vacancy rates. We've gathered information on four of the most desirable cities in the country for renters to help kick-start your search. 

Toronto

Toronto has one of the lowest vacancy rates in the country, so it's more or less a given that there will be someone wanting to rent your space — particularly if the property is in or close to the downtown core.

Many detached and semi-detached houses in Toronto have been converted into multiple rental units. If you can afford to buy one of these properties, the return on investment has great potential since you'll be able to collect rent from multiple tenants with the purchase of one home. 

Although real estate prices in Toronto are high, new mortgage rules that have come into effect in Canada in 2018 have led to a slower Toronto real estate market. So, now may be a better time to purchase an investment property in Toronto than it would have been even a few years ago. 

Can't afford to buy a rental property downtown? The Greater Toronto Area is constantly expanding, creating investment opportunities in places like Oshawa and Barrie. These cities are connected to the GO train and provide easy access for commuters, which is appealing for renters who work in Toronto but may be looking to save money by avoiding its steep rental costs. 

Calgary

Alberta's population continues to climb. Many Canadians move to Alberta to work in the oil and gas sector, as do international immigrants. This domestic and international influx has paved the way for low vacancy rates in cities like Calgary. Another trend worth noting is the increase in the decision to rent among the millennial generation in the city. With many young people deciding to rent instead of buy, the demand for a rental property becomes even higher. If you can afford to purchase a property to rent out in Calgary, millennials should be the first demographic to consider as potential tenants. 

Vancouver

Another city with a consistently low vacancy rate is Vancouver. Like Toronto, properties here don't come cheap — but if you have the opportunity to invest in one, there will be a consistent demand from renters. Immigration also has a huge influence on the demand for rental property in Vancouver, as many immigrants who are new to Canada hope to call its most western province home. Investors may want to look at well-connected neighbourhoods just outside downtown, like East Vancouver and even North Burnaby, where prices are lower but rental demand is still high. A mortgage that allows you to easily leverage the equity of your property could be beneficial when buying in expensive cities like Vancouver or Toronto.

Charlottetown

It doesn't have the big city draw of Toronto or Vancouver, but the small-town vibe of Charlottetown is equally appealing in a different way. Prince Edward Island is a treasure trove of natural beauty, including its famous red sand beaches. Canadians flock to this Maritime gem for holidays, meaning you and your family could use property purchased here as a cozy retreat in the warmer months and rent it out over the winter. Recent immigration to the province has contributed to the Island's vacancy rates, which hit an all-time low late last year. Plus, it's certainly more affordable than Toronto or Vancouver — the average home price in Prince Edward Island last November was $204,577. 

How to get started

It's one thing to have an idea of places to start looking for a new property purchase, but what about the financial implications? 

Flexibility is important. If you can borrow within your loan at a low rate, you'll be able to free up some money to finance repairs or other costs associated with owning a rental property. Manulife Bank's handy account, Manulife One, lets you access your equity at any time and helps you manage unforeseen matters. Have an unexpected vacancy? When a tenant leaves, you don't have to rush to replace the income with just any new tenant you can find. Manulife One only requires you to pay the loan interest (not the full mortgage). This provides greater flexibility when rental income is disrupted. Tracking expenses is another helpful feature of this account, as you'll be able to consolidate all of your accounts to keep everything — including rental payments — in one place, ensuring debt is paid off faster. 

No matter where in Canada you decide to invest in a rental property, a flexible mortgage will play an essential role in making sure that you get the most out of your investment. Manulife One may be just what you need to make your rental property dreams a reality.