If you’re thinking about growing your real estate portfolio, there’s one investment strategy that continues to gain attention — investing in multi-unit residential properties. Whether you’re a seasoned investor or just starting out, the pros and cons of investing in multifamily properties are worth carefully considering before jumping in.

At Bahia Realty Group Inc., we work with real estate investors across the GTA who are looking to make smart, income-generating decisions. And when it comes to building long-term wealth and creating consistent cash flow, multifamily real estate investing can offer some powerful advantages — if done right.

In this blog, we’ll break down everything you need to know about investing in multi-unit residential properties — what it is, what it isn’t, and whether it’s the right fit for your financial goals.

🏢 What Is a Multi-Unit Residential Property?

A multi-unit residential property (also known as multifamily real estate) is any residential property that contains more than one unit under a single roof or structure. This includes:

• Duplexes (2 units)
• Triplexes (3 units)
• Fourplexes (4 units)
• Small apartment buildings
• Larger multifamily properties with five or more units
• High-rise apartment buildings or apartment complexes

Multi-unit residential properties are a type of rental properties that can generate consistent rental income.

In contrast, single-family homes or single family rentals only have one housing unit and one set of tenants.

🧠 Why Multifamily Real Estate Investing Is Growing in Popularity

There are a few reasons why multifamily investing has gained traction among both experienced investors and those new to real estate investment:

• Stronger rental income potential from multiple tenants
• Easier to scale your investment portfolio
• Potential for tax benefits investing in rental property
• Better risk management during economic downturns
• Increased appeal in strong rental markets like Toronto and the GTA

Investing in a single family home, on the other hand, is often more straightforward and requires less capital, but it offers less scalability compared to multifamily properties.

But while there are definite upsides, it’s not a hands-off solution unless you’re prepared to work with the right property management team.

Let’s break down the pros and cons of investing in multifamily investment properties, so you can make a confident decision.

✅ The Pros of Investing in Multi-Unit Residential Properties

1. Reliable Monthly Cash Flow

With multiple units generating monthly rent, multifamily homes can deliver a steady cash flow — even if one or two units are temporarily vacant.

Unlike single family homes, where a vacancy means zero income, multifamily properties reduce that risk.

💡 Example: If you own a triplex and one tenant moves out, the other two units can still cover expenses like your mortgage interest, property taxes, and maintenance costs.

2. Greater Scalability

Want to grow fast? Multifamily real estate investing lets you scale your portfolio more efficiently than buying one unit at a time.

Instead of purchasing 10 separate houses, you could buy one apartment building with 10 units — simplifying management and maximizing investment potential.

3. Lower Cost Per Unit

When you break down the cost of purchasing a multi family property, the per-unit cost is often lower than buying the same number of single family homes individually.

This can mean:

• Lower maintenance costs per unit
• Shared expenses (e.g., one roof, one HVAC system)
• A better return on each rental dollar

4. Tax Benefits

There are several tax benefits to investing in multifamily properties:

• Write-offs for property management fees
• Deduct mortgage interest
• Claim capital improvements
• Depreciation over time (check with your accountant for current rules)

These can all significantly enhance your bottom line — especially over the long term.

5. Easier Financing for Larger Properties

Believe it or not, banks often prefer financing multifamily assets, especially when they’re income-producing and professionally managed.

In some cases, commercial real estate lenders view these as safer investments than speculative ground-up development projects or retail properties.

6. Option to Live in One Unit

You can choose to make your multi-unit property an owner-occupied property, living in one unit while renting out the others.

This setup offers:

• Lower financing rates for primary residences
• Potential for house hacking (living for free or close to it)
• Better control over management

This is a common strategy for first-time real estate investors who want to ease into the process.

⚠️ The Cons of Investing in Multi-Unit Residential Properties

As with any investment, there are trade-offs. Here are the key challenges and considerations you need to weigh.

1. More Management Complexity

Managing multiple units means dealing with multiple tenants, more leases, more repairs, and more communication. If you’re not prepared to be hands-on, you’ll need to hire a professional property management company.

Keep in mind:

• Property management companies typically charge 6-10% of monthly rent
• You’ll need someone to handle leasing, maintenance, and rent collection
• Even the best property manager needs oversight and direction

2. Higher Upfront Costs

Multifamily investments often come with a higher purchase price, larger down payments, and stricter lending requirements.

You’ll need:

• More capital to get started
• Strong credit and proof of rental income potential
• Accurate budgeting for capital improvements and maintenance costs

This can be a barrier for new investors without strong financing options.

3. More Involvement During Vacancies or Turnover

Every time a unit turns over, you’ll face:

• Lost income during vacancy
• Cleaning and repair costs
• Marketing and showing the unit
• Possibly negotiating new lease terms

This means consistent involvement, especially with larger multifamily properties.

4. Zoning and Licensing Requirements

In cities like Toronto, multifamily properties may require special licenses, fire inspections, or zoning compliance — especially for five or more units.

Navigating this can be time-consuming and often requires:

• Professional legal advice
• Permit applications
• Coordination with city inspectors

Failing to follow these guidelines can delay cash flow or lead to fines.

5. More Exposure During Market Downturns

Although multifamily homes are generally more stable than other commercial real estate investing options, they’re not immune to risk.

If:

• The real estate market shifts
• Job loss increases vacancy rates
• Interest rates rise sharply

You could see reduced monthly rent, lower demand, and increased pressure on your cash flow.

Having a buffer and being conservative in your projections is key.

📊 Is Multifamily Investing Right for You?

Ask yourself:

• Do you want to generate rental income on a monthly basis?
• Are you open to working with (or becoming) a property manager?
• Can you handle the upfront capital and planning involved?
• Do you want to diversify your real estate investment strategy?
• Are you in it for passive income or long-term capital appreciation?

If your answer is “yes” to most of these, investing in multifamily properties could be a solid fit.

🏡 A Local Look: The GTA Multifamily Market

The Toronto real estate market continues to show strong demand for rental housing. With affordability challenges in single family homes, more people are turning to rentals — creating a robust opportunity for multifamily investors.

Trends we’re seeing in the GTA multifamily market:

• Increased demand for apartment buildings
• Younger renters staying in rental longer
• Rising fair market value in high-density zones
• More condo owners converting units into rental property
• Growing popularity of owner-occupied duplexes and triplexes

🧠 Final Thoughts: Build Wealth with Confidence

Investing in multi-unit residential properties offers a powerful path toward building wealth, especially in markets like Toronto where rental demand remains high. With the right research, financing, and property management team, this strategy can deliver reliable returns and steady cash flow for years to come.

But it’s not for everyone. Multifamily investing requires planning, knowledge, and a willingness to manage multiple moving parts. If you’re ready to take that step — or want help figuring out if this is the right move for you — we’re here to help.

At Bahia Realty Group Inc., we work with real estate investors at every stage, from acquisition to property management, and everything in between. Let’s build your strategy — and your portfolio — the smart way.

📞 Thinking of investing in multifamily properties in the GTA?
We’ll help you analyze opportunities, navigate the market, and build a plan that fits your life and goals.

📧 jas@thebahiateam.com
📞 (416) 498-3444
🌐 www.bahiarealtygroupinc.com