Toronto Fourplex (Multiplex) + Garden Suite (ADU)
Turn your property into a legal 4-unit multiplex (low-rise multi-family)—and add a garden suite ADU for a potential fifth unit. We handle zoning review, design, permits, and construction from start to finish.
Toronto’s Fourplex (Multiplex) Era Has Begun
Toronto is now a fourplex city, which means many neighbourhoods can support a 4-unit multiplex (low-rise multi-family) without changing the look and feel of the street. You can convert an existing home or build new to create four self-contained rental suites designed for long-term value and stable cash flow.
If your lot qualifies, you can also add a Garden Suite or Laneway Suite (ADU/ARU) to create a potential fifth unit—a smart way to increase density while staying within a low-rise footprint.
What Is a Fourplex?
A fourplex is a 4-unit multiplex—a low-rise, house-form multi-family home with four self-contained residential units under one main roofline. Each unit typically includes a kitchen, bathroom, living area, and sleeping space, with separate unit doors (and sometimes separate entrances).
In many Toronto neighbourhoods, a fourplex can be built new or created through a conversion, as long as the design meets applicable zoning and building standards (ex: height, setbacks, lot coverage, and life-safety requirements). A well-planned layout can stack kitchens/baths to simplify servicing, control costs, and improve long-term operating efficiency.
- Multiplex type: 4 units (duplex = 2, triplex = 3, fourplex = 4)
- Low-rise multi-family: fits neighbourhood scale while increasing housing supply
- Efficient design: aligned plumbing + mechanical chases to reduce build and operating costs
Why Fourplexes Are Reshaping
Toronto’s Housing Market
Toronto’s fourplex framework is a strong “missing middle” solution because it adds housing supply while keeping a house-form, low-rise multiplex (multi-family) look that fits most neighbourhood streetscapes. For homeowners, converting a single-family house into a legal fourplex (4-unit multiplex) can turn underused space into reliable rental income—without moving to a mid-rise building type.
For investors, fourplexes often underwrite more like income property than luxury-home comparables, which can make performance easier to evaluate over time. And when a lot can support it, adding a Garden Suite or Laneway Suite (ADU/ARU) creates a potential fifth unit—improving unit mix, diversifying income, and expanding financing pathways that apply to 5+ unit properties.
- House-form multi-family: low-rise density without changing neighbourhood character
- Better unit economics: diversified rents across 4 doors (or 5 with an ADU)
- More flexibility: mix of studios/1-beds/2-beds depending on market demand
- Potential approvals advantages: some parking and fee requirements may be reduced depending on property and scope
- Financing upside: 5+ units may open additional multi-unit financing options (case-by-case)
Two Practical Paths: Convert or Build New
There are two common ways to create a legal fourplex (4-unit multiplex / low-rise multi-family) in Toronto: convert an existing home or build a new house-form fourplex. The right choice depends on your structure, lot constraints, and your target timeline.
Convert an existing house (best when the shell is strong):
- Enough interior volume to create 4 code-compliant suites
- Existing window/exit conditions that support safe egress
- Basement height and structure that reduce major underpinning needs
- Scope typically focuses on fire/life-safety upgrades, sound control, and reworking electrical/plumbing
Build new (best when the house is too constrained):
- Clean, predictable layouts with stacked kitchens/baths for efficiency
- Modern building systems + envelope performance for lower long-term maintenance
- Easier to standardize unit mix (studios/1-beds/2-beds) for leasing demand
- Better control over capex and construction sequencing
Adding a Garden Suite for a Fifth Unit
A garden suite is a detached, self-contained home in the rear yard. On many properties, it can complement a fourplex—creating four units in the main building plus one backyard unit (an ADU/ARU) while preserving low-rise character.
What makes a garden suite project work well:
Smart servicing routes (water, hydro, drainage) that reduce disruption and cost
Respect for tree protection and site constraints
A clear access path so the suite feels private and functions well long-term
Layout choices that support comfort (light, storage, noise control)
Costs and Timelines You Can Plan Around
Every site is different, but you can plan using realistic ranges. Most projects move through four stages: feasibility → design & permit drawings → approvals → construction.
Typical timeline (ballpark):
Feasibility + concept: 2–4 weeks
Design & permit-ready drawings: ~6–10 weeks
Permitting / review: varies by scope and submission quality
Construction: conversions often shorter than new builds; scope drives schedule
Budget reality (keep it general, safer):
Conversions are often more cost-effective when the existing structure works
New builds typically require a larger budget but provide predictable layouts and modern systems
Major cost drivers: underpinning/structure, servicing upgrades, fire/life-safety, and finish level
Capital and Cash-Flow: A Clear Example
This example assumes a stabilized net operating income (NOI) valued using a 5% capitalization rate (cap rate)—a common approach for appraising small multi-residential / low-rise multi-family (multiplex) properties. The “Value-Add Gain” shown is the difference between the cap-rate value and the combined acquisition + construction cost, before financing fees, refinance costs, or disposition expenses.
Item | Amount |
|---|---|
Purchase Price | $1,000,000 |
Downpayment | $200,000 |
Construction Costs | $1,000,000 |
Closing Costs | $34,450 |
Capital Required | $1,234,450 |
Mortgage Required | 800,000 |
Post-Project Value @ 5% Cap Rate | $3,060,000 |
Total Purchase + Construction Cost | 2,000,000 |
Value-Add Gain | $1,060,000 |
This scenario assumes stabilized net operating income that supports a five percent capitalization rate, a common way lenders and appraisers value small multi-residential properties. The gain shown is the difference between the cap-rate value and the combined acquisition and build cost, before disposition expenses or refinance costs.
Figures are illustrative only. Actual costs, timelines, rents, and cap rates vary by property conditions, approvals, market pricing, and financing terms.
One Fourplex vs. Severing and Building Two
Many owners ask if lot severance in Toronto and building two fourplexes delivers a better return than building one fourplex (4-unit multiplex / low-rise multi-family). The upside can be attractive on wide lots, but severance increases approval complexity, duplicated servicing, carrying costs, and total capital required. The table below shows a simple side-by-side comparison using the same cap-rate method.
One Fourplex | Sever & Build | Per Fourplex (Severed) | |
|---|---|---|---|
Purchase | $1,000,000 | $1,500,000 | $750,000 |
Construction | $1,000,000 | $2,000,000 | $1,000,000 |
Total Cost | $2,000,000 | $3,500,000 | $1,750,000 |
Value @ 5% | $3,060,000 | $6,120,000 | $3,060,000 |
Gain | $1,060,000 | $2,620,000 | $1,310,000 |
Illustrative example only. Actual costs, rents, NOI, cap rates, approvals, and servicing requirements vary by site and market.
CMHC MLI Select Program for
Fourplex + Garden Suite
CMHC MLI Select is a multi-unit mortgage loan insurance program designed for eligible rental and multi-family (multiplex) properties in Canada. Compared to many conventional financing options, qualifying projects may access more flexible lending terms—depending on the property, underwriting, and the project’s MLI Select score. It’s one reason a Fourplex + Garden Suite (5 units total) can be a powerful configuration in Toronto.
Why a Fourplex Alone Doesn’t Qualify
A fourplex is a 4-unit multiplex (low-rise multi-family). In many cases, CMHC MLI Select is intended for 5+ residential units, which means a fourplex on its own may not meet the minimum unit threshold. If you’re building only four units, you’ll typically explore conventional residential or commercial-style multi-unit financing instead.
How a Garden Suite Changes the Game
Adding a garden suite (a detached backyard unit) can create a fifth self-contained dwelling on the property. With 4 units in the main building + 1 garden suite, the project may meet the minimum unit count that some multi-unit financing programs look for—opening up additional lending pathways for eligible borrowers.
Financing Advantages Under MLI Select
Right now, “LTV up to 95%” and “50 years” reads like a guarantee. Keep the benefits but phrase them correctly.
- Potentially higher leverage than many conventional multi-unit options (subject to eligibility and underwriting)
- Longer amortization options may be available for qualifying projects, which can improve monthly cash flow
- Competitive pricing is possible because the loan is CMHC-insured (terms depend on lender and file strength)
- Refinance pathway may be available once the property is stabilized, depending on lender criteria
- MLI Select scoring incentives: projects that perform well on affordability, accessibility, and energy efficiency can qualify for stronger terms (case-by-case)
Example Scenario: Fourplex vs. Fourplex + Garden Suite
- Fourplex only (4 units): Often financed using conventional residential or multi-unit lending. Equity requirements, rates, and amortization may be more conservative depending on the lender.
- Fourplex + Garden Suite (5 units): May qualify for additional multi-unit financing routes, including CMHC-insured options, depending on eligibility, underwriting, and project scoring.
Why This Matters in Toronto
Toronto’s rental market is extremely competitive, and cash flow can be tight with conventional financing. By qualifying under MLI Select:
- Investors can hold properties longer, leverage more equity, and scale faster without getting squeezed by debt service.
- Homeowners can create multi-generational housing (parents in one unit, kids in another, tenants in the rest) while reducing carrying costs through favorable financing
How to Choose the Right Property
The best fourplex candidates reduce major cost drivers before you pick up a hammer. Look for a house that can support a legal fourplex (a 4-unit multiplex / low-rise multi-family) with minimal structural disruption, plus a rear yard that can realistically support an ADU such as a garden suite (or a laneway suite where eligible). The right property typically has efficient layout potential for stacked suites, realistic servicing and upgrade paths, and site conditions that won’t be constrained by access or tree limitations. Parking and access requirements can vary by property and proposal, so it’s smart to confirm feasibility early and plan practical solutions that fit the site.
The Process, Step by Step
Every successful project starts with a feasibility review. First, we confirm what’s permitted on your lot, identify constraints, and test a layout that meets life-safety and building requirements. Next, concept design is refined into coordinated permit-ready drawings that align architectural, structural, mechanical, and electrical details into one clear package. Approvals follow (including variances if required), then procurement begins so long-lead items are ordered early. Construction proceeds in a disciplined sequence—from structure and rough-ins through insulation, drywall, finishes, and commissioning—followed by inspections, occupancy, and a clean handover with as-builts, manuals, and warranties to support lease-up and refinancing.
Design Decisions That Protect NOI
Smart multiplex design looks simple, but the best results come from careful trade-offs that protect NOI. Efficient planning—like stacking kitchens and bathrooms and keeping service runs short—reduces build complexity and long-term maintenance. Right-sized bedrooms, durable finishes, and thoughtful storage improve tenant satisfaction and reduce turnover, while properly executed sound and fire assemblies prevent future issues that can hurt performance. A comfortable, well-ventilated home with reliable heating and cooling also reduces complaints and keeps the asset stronger over the long run.
Financing the Build Without Guesswork
Fourplex projects can be financed in different ways depending on whether you’re converting an existing home or building new, but the fundamentals stay the same: a conservative pro-forma, realistic rents, full operating expenses, and a contingency buffer. Many owners use an acquisition mortgage and then fund construction through construction financing, a secured line of credit, or private funds during the build, followed by a refinance once the property is stabilized. If you add a garden suite ADU and reach five units, additional multi-unit financing routes may become available depending on eligibility and underwriting. The goal is to structure financing so your carrying costs remain comfortable even if approvals or schedules stretch.
Is a Fourplex Right for You?
A fourplex isn’t a quick DIY renovation—it’s a multi-unit (multiplex / low-rise multi-family) development project that requires planning, patience, and clean execution. If you have access to capital, a realistic timeline for approvals and construction, and a clear lease-up plan, the upside can be compelling: more doors on one lot, diversified rental income, and long-term value tied to performance rather than single-family comparables. The best outcomes come from choosing the right property, designing for efficiency, and delivering code-compliant, rent-ready suites that hold up over time.
FAQ
Your Questions Answered
Looking into building a fourplex or adding a garden suite in Toronto? You probably have a lot of questions about costs, timelines, financing, and rules. To help you get started, we’ve put together answers to the most common questions homeowners and investors ask about fourplex + garden suite projects
What is a Fourplex + Garden Suite?
A fourplex is a residential building divided into four self-contained units, each with its own kitchen, bathroom, and living space. A garden suite is a secondary dwelling built in the backyard, also fully self-contained. Together, they create five independent homes on a single lot. This configuration is especially popular because it qualifies for the CMHC MLI Select program, which requires a minimum of five units and offers attractive financing benefits.
How can I finance the construction?
We partner with trusted lenders who specialize in multi-family financing. Our financing specialists will review your project and guide you through the best options, from conventional mortgages to construction financing and CMHC-backed programs.
What are the benefits of a Fourplex + Garden Suite?
This setup offers the highest density currently allowed on most residential properties in Toronto. It creates affordable rental options, supports multigenerational living, and generates long-term rental income to offset mortgage costs. By maximizing your property’s potential, you’re building both financial security and community-focused housing.
How does this qualify for the CMHC MLI Select Program?
With four units in the main building plus a garden suite, you meet the five-unit minimum required for the CMHC MLI Select program. This can unlock longer amortizations, higher loan-to-value ratios, and better interest rates, making your project more financially sustainable. Approval is subject to CMHC review, which our financing partners can help you navigate.
Can I use one of the units for short-term rentals?
Yes. As long as you or an immediate family member lives in one of the units as your primary residence, you may apply to use one of the remaining suites as a short-term rental in Toronto.
Do I need to build a new home to create a Fourplex + Garden Suite?
Not always. If your current home’s layout is suitable, you may be able to retrofit it into four units and add a garden suite in the backyard. Even if your existing house is only viable for a duplex or triplex, the cost savings from reusing the structure may outweigh the reduced rental income from not having five full units.
How long does it take to build a Fourplex + Garden Suite?
Timelines depend on project complexity, but on average it takes 8 to 12 months from start to finish. At Xavieras, we have never exceeded 12 months on a new-build project, so you can feel confident in the feasibility of your timeline.
Are there development charges for constructing a Fourplex?
No. Development charges are waived for projects limited to four units. Garden suites are also exempt, making both options financially attractive.
Do these rules also apply to laneway suites?
Yes. The same policies that apply to garden suites also apply to laneway suites, so the benefits extend to properties with laneway access.
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