We’ve all heard it—Toronto is in a buyer’s market right now, which means there are some solid real estate deals to be had. For a long time, condos were the go-to for investors because they’re cheaper and a lot easier to manage.
But lately, there’s been a noticeable shift towards multiplexes, especially with the rising rents and better cash flow potential. So, is it time to jump on the multiplex bandwagon? Let’s break it all down.
Why Multiplexes Are Gaining Popularity
First, let’s look at what’s driving the shift towards multiplexes. As prices drop and interest rates improve, the cash flow on these properties is looking a lot better. I
n fact, you can buy a Toronto bungalow with two units and immediately start earning positive cash flow—something that’s nearly impossible with condos right now, where you’re more likely to lose money each month.
But it’s not just about today’s cash flow. One major perk of investing in a multiplex is that having positive cash flow can help you qualify for more mortgages in the future. On the flip side, negative cash flow—like what you’d get with a condo—can hurt your ability to borrow for future investments.
The Appreciation Factor: Condos vs. Multiplexes
It’s always tough to predict appreciation, but there are a few signs that favour multiplexes over condos in Toronto. For one, there’s only so much land available for houses in the city, which creates a tighter market compared to condos.
More investors are starting to look at houses because they offer a more balanced return with rental income and the potential for value-add projects like renovations.
Plus, even luxury developers are starting to embrace multiplexes, thanks to new city incentives like no development charges and the ability to build larger multiplexes.
More buyers are entering the market for these types of properties, which is a good sign for future growth.
Why Condos Are Still Attractive to Some Investors
That said, condos are still appealing for those who want an easy, low-maintenance investment. They’re newer, have less upkeep, and the condo management takes care of the common areas.
But that convenience comes at a price—higher condo fees, which can eat into your cash flow. You’re also more likely to end up with negative cash flow if you buy a condo in today’s market.
The Tenant Difference: Multiplexes vs. Condos
Another thing to consider is the type of tenant you’ll get. In multiplexes, you’re likely to see more blue-collar tenants, while condos tend to attract white-collar professionals. Both types of tenants can be great—good income, rent paid on time, and well-maintained units.
The main difference is that with a multiplex, you’ll get more rental applicants, but you’ll also need to do more due diligence during the tenant screening process. More work, yes, but more opportunity too.
Cash Flow Comparison: Condo vs. Multiplex
Let’s break down the numbers. Say you’re looking at a one-bedroom condo priced around $500,000. After a 20% down payment and closing costs, you’re investing about $115,000. This condo might rent for $2,300 a month, but after expenses, you’ll be out of pocket about $400 each month. That’s a rental return on capital of 1.8%, before appreciation.
Now compare that to a starter house in Toronto with three units, priced at $1 million. You’ll need about $235,000 upfront—yes, more than double. But the rent is also much higher, around $6,000 a month. Even after higher maintenance costs and property management fees, you’ll still be cash-flow positive, with a rental return on capital of 10% before appreciation. The difference is huge!
So, Are Multiplexes Worth It?
Ultimately, it depends on what kind of investor you are. If you want something easy and hands-off, condos might be the better choice.
But if you’re willing to put in a bit more effort, multiplexes offer far better returns. And with potential long-term growth, especially if you add value through projects like building a backyard unit, the numbers look even more attractive.
How We Can Help
If you’re interested in exploring specific Toronto multiplex deals or want advice on which investment strategy suits you best, feel free to reach out.
Our Toronto-based real estate brokerage specializes in multiplex properties.
Whether you’re buying a ready-to-rent property, converting a space, or building new, we’ve got the expertise to guide you through. Here’s what it’s like to start as a client with us:
Initial Consultation: We’ll talk with you to understand your needs and teach you how to invest wisely in Toronto real estate.
Market Search: We’ll search the market to find the perfect property for you.
Renovation Support: If the property needs renovations, our trusted contractors are ready to help, and we’ll coach you as you manage the project.
Leasing and Management: If you need help renting out and managing your property, our leasing and management team is here for you.
Ready to get started? Click on the link below, and let’s start working together!
What Toronto Real Estate Investment Is Right For You?
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