How to Recession-Proof Your Real Estate Portfolio | Mortgage & Cash Flow Strategies for Investors

In this solo episode of the Wisdom Lifestyle Money Show, host Scott Dillingham tackles one of the most pressing concerns facing Canadian real estate investors: how to protect and optimize your portfolio during times of economic uncertainty. With trade tensions between the U.S. and Canada, shifting interest rate forecasts, and growing vacancy rates across the country, Scott breaks down the proactive steps every investor should be taking right now rather than waiting for problems to arrive.

Scott opens by reframing economic turbulence as opportunity. Rather than retreating from the market, he encourages investors to use periods of uncertainty to optimize their portfolios, starting with a mortgage portfolio review. He walks through how extending your amortization from, say, 20 years to 30 years can dramatically improve monthly cash flow on investment properties, even if your rate increases at renewal. By treating the 30-year amortization as a minimum payment rather than a fixed obligation, investors gain the flexibility to increase payments when times are good and pull back when cash flow tightens. The Bank of Canada's policy rate currently sits at 2.25%, with most major forecasters expecting it to hold steady through much of the year before potential rate hikes begin toward late 2026 or into 2027, making now a strategic window to lock in favourable terms.

A major theme throughout the episode is the mortgage renewal wave hitting Canadian homeowners and investors alike. According to the Bank of Canada, roughly 60% of all outstanding mortgages are expected to renew in 2025 and 2026, with five-year fixed-rate holders potentially facing payment increases of 15% to 20%. For investors, this underscores the urgency of reviewing and restructuring financing before renewal deadlines arrive. Scott emphasizes that even investors with strong current cash flow should consider resetting their amortization to build in a financial buffer.

Scott also addresses rising vacancy rates across Canada. CMHC's latest data shows the national purpose-built rental vacancy rate climbed to 3.1% in 2025, up from 2.2% the year prior, driven by record levels of new rental construction and reduced immigration. He cautions investors about the temptation to accept lower-quality tenants just to fill units and urges building a reserve fund of at least three months' rent per unit to maintain the flexibility to wait for the right tenant. On the buying side, Scott argues that the current buyer's market presents strong acquisition opportunities, especially for listings that have sat for 60 to 90 days, and notes that investors are increasingly gravitating toward multifamily properties in Canada and cross-border investment in the U.S. This episode is packed with actionable strategies any Canadian real estate investor can implement immediately to strengthen their portfolio against whatever the market brings next.