This is for educational purposes only; it does not guarantee future performance or serve as financial or tax advice.
Toronto is likely moving ahead with legalizing 6-plexes across the city (instead of just in Old Toronto and East York) and waiving development charges — and while it’s creating a lot of buzz, most investors don’t realize how complex and risky these projects really are.
On the surface, building six units sounds like the ultimate rental play. In reality? It’s expensive, slow, and often not worth it for most people.
Development Charges May Be Waived, But That Doesn’t Make It Easy
Yes, avoiding $300K+ in development charges is a big deal — but don’t get ahead of yourself. The waiver hasn’t been finalized yet, and even if it is, it doesn’t erase the high cost and red tape that comes with larger builds.
Once you cross into 5+ unit territory, you’re into commercial fire code, steel framing, sprinkler systems, and special window rules. Most people budget for the build, but forget all the extras that come with scaling up — and they’re not cheap.
Most Toronto Lots Aren’t 6-Plex Ready — And the Rules Keep Changing
The vast majority of Toronto lots simply aren’t set up for six units. Between angular plane restrictions, lot coverage rules, and setbacks, fitting everything in while staying legal is a nightmare.
Even smaller plays like garden suites are running into new rules — like sloped roofs and access path restrictions — especially on tight downtown lots. The city keeps shifting the goalposts, which makes it really hard to plan or budget with confidence.
Financing a 6-Plex? Expect to Start With Private Money
Think CMHC will save the day? Think again. Most 6-plex projects don’t qualify for insured financing upfront — especially if you’re converting an existing home instead of building from scratch.
That means most investors have to use expensive private money and only refinance into CMHC later. It’s a tough pill to swallow when you’re already sinking serious capital into a project that won’t generate income for a while.
Bigger Projects Mean Tougher Exits — and Surprise HST Bills
Here’s what most people don’t think about: your buyer pool shrinks the bigger and more complex your build gets.
A 6-plex is going to appeal to serious investors only — and they’re not buying based on emotion, they’re looking strictly at the numbers. That usually means lower resale values and longer time on market.
Add in the HST surprise — where a substantial renovation can trigger tax on the full value of the finished building — and your profit can disappear fast. We’ve seen investors hit with $300K+ HST bills they didn’t even know were coming.
So What Are We Doing Instead?
We’re sticking to what actually works: buying ~$900K single-family homes and converting them into legal triplexes.
With $150K–$200K in renos, you get solid cash flow without triggering HST, and the project stays in the residential financing lane — meaning better rates, more options, and less hassle.
Down the line, we can add a garden suite in the backyard and push the income even higher — often outperforming 6-plexes on total ROI with way less risk.
A typical garden suite can bring in $3,500/month, and paired with a triplex, that gives you strong returns with more flexibility to sell or refinance. Plus, these smaller projects don’t attract as much city scrutiny, and they’re much easier to build and manage.
Let’s Do This Right - Together!
If you’ve got $400K+ in capital and want to grow your rental portfolio the smart way, we can help. We’ll walk you through the full journey — buying, building, leasing, and managing — so you can scale your portfolio with confidence and avoid the big mistakes that most investors make chasing hype.
Not every home or lot is set up for this. You need the right layout, access, lot depth, and zoning — and that’s where we come in. We’re a Toronto real estate brokerage that specializes in value-add multiplexes. We help investors like you find properties with real potential, guide you through renos, and connect you with tenants, financing, and even property management if you want a hands-off investment.
Here’s what it looks like when you work with Elevate:
- Strategy Call: We get clear on your goals and walk you through how to invest smart in Toronto. Straight talk, no fluff.
- Property Search & Purchase: We find the right property that fits your plan — whether it’s turnkey or value-add.
- Renovation Guidance: Need renos? We’ve got trusted contractors, and we’ll coach you through the process so you don’t get burned.
- Leasing & Management: Want help renting it out or managing it long-term? Our team’s got that covered too.
Want to see what’s possible for you? Book a strategy session with us here.
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!
