WHY ONTARIO REIs SHOULD BE TARGETING 5-UNIT BUILDINGS (NOT TRIPLEXES OR FOURPLEXES)

Most Ontario investors aim for duplexes, triplexes, or fourplexes.

But the biggest jump in long-term wealth and financing power comes when you cross into five units or more. This blog explains why 5-plex conversions make more financial sense — and why REIs should stop thinking of properties as “houses” and start thinking in square footage and income potential.

5+ Units Unlock Commercial Financing

Once your building hits five units, lenders treat it as a commercial income asset, not a residential one.

Benefits include:

• DSCR-based approval

• Better amortization options

• Income-based lending decisions

• Higher refinancing potential

• Less reliance on personal income

This alone can change an investor’s entire growth trajectory.

Your Value Is Based on Income — Not Comps

Triplexes and fourplexes are capped by residential comparables.Your neighbour’s sale affects your value.

A 5-plex is valued using the income approach (NOI ÷ cap rate).

Meaning:

• Operate better → value increases

• Improve layouts → value increases

• Raise rents → value increases

You control the appreciation.

You Often Only Need ~2,500 Sq. Ft. to Hit 5 Units

Most older Ontario buildings have:

• Large basements

• Attics with full head height

• Oversized floorplates

• Space for small rear additions

REIs underestimate how much density is already achievable — often without planning applications — if zoning already allows it as-of-right.

Parking Requirements Are No Longer a Barrier

Many municipalities have reduced or removed minimum parking requirements for new units.

This opens the door for 5-unit conversions even on smaller urban lots. More units = more resilience.

• Vacancies impact revenue less

• Repairs are absorbed more easily

• Overall NOI increases

Investors gain long-term stability.

Your building functions like a true commercial asset. Cashflow Becomes More Stable More units = more resilience.

• Vacancies impact revenue less

• Repairs are absorbed more easily

• Overall NOI increases
  

Investors gain long-term stability.

Your building functions like a true commercial asset. The ROI on Renovation Costs Is Dramatically Higher You’re already paying for:

• Fire separations

• Electrical upgrades

• Mechanical improvements

• New layouts

• Permit drawings

The incremental cost of adding the 4th and 5th units is often small compared to the increased income and appraisal value. How Rojas Empire Helps Investors Execute 5-Unit Strategies We support investors by:

• Assessing realistic density potential

• Evaluating zoning & as-of-right permissions

• Designing efficient, code-aligned unit layouts

• Preparing permit-ready drawings

• Leveraging 3D scans for accuracy

• Coordinating with inspectors & engineers

Our goal is simple: Turn your building into a high-performing commercial income asset. Final Thoughts A triplex creates income. A 5-plex builds wealth.

If you’re considering a conversion, reach out — we’ll review your property and show you what’s possible.

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