Fourplex Properties
1.0 The Cash Flow King: The Fourplex Properties Advantage
For serious real estate investors, the fourplex is a game-changer. A fourplex, or 4-plex, is a single building divided into four separate apartment units. It represents the pinnacle of residential real estate investing—the largest and most profitable property you can buy while still qualifying for a residential mortgage. This unique position makes it a powerful vehicle for generating substantial cash flow and accelerating portfolio growth.
2.0 Why a Fourplex is the Sweet Spot for Investors
Investors specifically seek out fourplexes for several key strategic advantages that are hard to find in other property types.
Maximum Doors with a Residential Mortgage: This is the number one benefit. In Canada, you can use a more accessible and often lower-cost residential mortgage to finance properties with up to four units. Once you hit five units, you must get a commercial loan, which has stricter lending criteria. A fourplex maximizes your leverage under the best possible financing terms.
A Powerful Cash Flow Engine: With four separate income streams, a fourplex can generate significant positive cash flow after all expenses and mortgage payments are made. The income from three units can often cover the entire building’s costs, allowing the fourth unit’s rent to be pure profit.
Forced Appreciation Opportunities: Many of Edmonton’s fourplexes were built decades ago and are ripe for cosmetic upgrades. This presents a massive opportunity for investors to “force appreciation” by renovating units upon turnover, modernizing the building, and increasing the rental income, which in turn increases the property’s overall value.
3.0 Finding and Analyzing a Fourplex
Finding a quality fourplex requires targeted searching and sharp analysis.
Crucial Due Diligence: With an older building, inspecting the “big ticket” items is non-negotiable. Pay close attention to the condition of the roof, windows, the main boiler or furnace system, and the electrical panels. A major repair on one of these systems can wipe out your cash flow for years.
Where to Look: Focus on mature, centrally located neighbourhoods that have historically had apartment zoning.
Run the Numbers: Use the key metrics for analyzing a deal: Net Operating Income (NOI), Cap Rate, and Cash-on-Cash Return. As a quick screening tool, some investors use the “1% Rule” (the total monthly rent should be at least 1% of the purchase price), but this should only be a preliminary check before a deeper analysis.
Crucial Due Diligence: With an older building, inspecting the “big ticket” items is non-negotiable. Pay close attention to the condition of the roof, windows, the main boiler or furnace system, and the electrical panels. A major repair on one of these systems can wipe out your cash flow for years.
4.0 Management and Operations
Managing four units is a significant step up from a duplex. It requires more time, organization, and a clear system for handling tenant requests and maintenance. At this scale, many investors begin to consider professional property management. The cost (typically 8-10% of gross rents) can be well worth the time and headaches saved, allowing you to focus on finding your next deal.
For a complete overview of multi-family strategies, return to our Guide to Multi-Family Investing.
This is just one of many investment strategies. For a complete overview, return to the Ultimate Guide to Real Estate Investing.
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Common Investor FAQs
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What is a good cap rate for an investment property in Canada?
While cap rates vary by neighbourhood and property type, a good target for a stabilized residential property in Canada as of Fall 2025 is typically between 4.5% and 6%. High-demand areas near the Universities or with legal suites may be on the lower end, while properties requiring some renovation might offer higher initial cap rates.
What makes a basement suite “legal”?
A legal suite in must meet specific safety and building code requirements. Key criteria include a separate entrance, specific window sizes for egress, a minimum ceiling height (typically around 6’11”), and independent heating and ventilation systems. Always verify the property has the required development and building permits from the city.
Which areas are best for cash-flowing properties?
As of 2025-2026, the best markets for cash flow are concentrated in the Prairie provinces and Atlantic Canada.
These regions offer the best “rent-to-price” ratio, where affordable property costs are combined with high rental demand, strong population growth, and low vacancy rates.
Top Prairie Markets: Calgary and Edmonton, AB, are leaders, offering high rental yields and a strong economic outlook. Saskatoon, SK, is also a top performer due to a severe housing shortage and a booming population.
Top Atlantic Markets: Moncton, NB, and Halifax, NS, stand out for their relative affordability and high in-migration, which fuels intense rental demand.
How much of a down payment do I need for a rental property in Canada?
For a non-owner-occupied investment property, the minimum down payment is 20% of the purchase price. If you plan to live in one of the units (i.e., “house hacking” a duplex or home with a legal suite), you may be able to purchase it with a lower down payment as it’s considered owner-occupied.
What are the new mortgage rules for investors in 2026?
Starting in 2026, Canada’s banking regulator (OSFI) is implementing new rules that make it harder for investors to qualify for mortgages.
The single biggest change is the elimination of “double-counting” income.
Previously, investors could use their same personal employment income to qualify for multiple properties. Under the new 2026 rules, once your personal income is used to secure one mortgage, it cannot be used again to qualify for another.
Each investment property will increasingly need to qualify on its own, based on the rental income it generates. This change makes positive cash flow the most important factor for growing an investment portfolio.
