If you’re serious about getting into real estate investing in 2025, it’s essential to understand the ins and outs of your options.
Multiplex investing isn’t one-size-fits-all, and every option comes with unique challenges and trade-offs. That said, with borrowing costs likely to drop and new financing options emerging, multiplex projects may become more accessible.
However, market appreciation isn’t as predictable as it used to be, so many investors are now chasing rental income through projects with multiple units. But make no mistake, while opportunities are there, this isn’t going to be simple.
Let’s break down the three main types of multiplex investment strategies for Toronto investors: turnkey properties, conversions, and new builds.
Option 1: Turnkey Multiplexes
The most hands-off approach to multiplex investing is a turnkey property. Turnkeys are already divided into rental units, come with finished interiors, and are ready to generate income right from the start.
In Toronto, you might find a 2-unit bungalow that’s rental-ready for around $950,000. After a 20% down payment and closing costs, expect to invest about $225,000 upfront.
A property like this could bring in about $300 in monthly cash flow after covering mortgage, taxes, and expenses (but not property management fees or contingencies). While you can see slightly better cash flow if you opt for a larger property, turnkey multiplexes generally won’t be life-changing in terms of monthly returns.
However, they offer low-effort, steady income. If you’re looking for simplicity, lower risk, and don’t want the stress of managing renovations, a turnkey property may be a smart move.
Option 2: Multiplex Conversions
If you’re up for a bit more risk, a conversion might be your answer. With conversions, you’re buying a property at a lower price point and investing in renovations to boost its value and rental income.
Imagine buying a semi in Toronto for $1 million with plans to convert it into a triplex, plus another $150,000 in renovation costs.
Once completed, a triplex conversion could yield around $2,000 in monthly cash flow.
The advantage here is in the refinance potential – you might see the property’s value jump to $1.3 million after renovations. A refinance allows you to pull out some of your capital and reinvest it into your next project, making conversions a great balance between risk and reward.
Just keep in mind that if you’re new to construction, things like time and costs can quickly spiral if not managed well.
Option 3: New Builds and Top-Ups
This is the high-risk, high-reward route: topping up a bungalow to build a fourplex or adding a garden suite. This option requires significant capital and construction expertise, but it can be worth it.
Consider a teardown for $800,000 in Toronto with plans for a fourplex. You’ll need a 20% down payment, but the big expenses will come from construction.
Expect construction costs of around $250 per square foot, bringing the total to about $1.2 million with soft costs factored in. Adding carrying costs could add another $150,000 to your total.
Once completed, this property could bring in $15,000 in monthly rental income, and with a 4.25% cap rate, the property value could hit over $3 million. If all goes according to plan, you could see around $3,000 in monthly cash flow.
But this approach requires serious capital, an understanding of construction management, and the patience for long timelines.
Financing Multiplex Conversions in 2025
Starting in 2025, a new CMHC program is set to make financing for conversion projects much more accessible. Investors who live in one of the units will have access to up to $1.8 million in financing, with the added funds capped at project costs.
This change could bring more investors into the conversion space, as it allows for smaller initial investments with solid value-add potential. With lower risk, less capital required, and shorter timelines, conversions may become a popular middle ground between turnkey and new build projects.
How We Can Help
Each multiplex investment option in Toronto comes with its own trade-offs. Turnkey properties offer simplicity but limited upside, conversions offer solid value with manageable risk, and new builds offer huge potential returns but come with high costs and complexity.
If you’re interested in exploring your options, let’s chat! 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 & Purchase: 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?
Check out our complete Toronto real estate investment guide for all the details and real-life examples. If you’re ready to dive in, just book a call with us!
