Should I Buy A Multi-Family Home in Toronto?

07/12/23

If you’re looking to buy a home in West Toronto, you may have noticed a few listings that include secondary suites or apartments. These are known as multi-family homes. As a unique property type, these homes offer a wide range of perks.

If you’re in the market for a new home, purchasing a multi-family property could work within your personal or financial vision for the future. Let’s take a closer look.

Table of Contents

What Exactly is a Multi-Family Home?
Why Are There So Many in West Toronto?
Are They a Good Fit For You?
- The Perks
Potential Drawbacks

What Exactly is a Multi-Family Home?

The term Multi-Family Home can be somewhat broad. However, in the case of West Toronto real estate, it typically refers to a specific type of residential property (most often a detached home) that has been modified to include separate living units that can accommodate multiple families or residents.

The general idea with multi-family homes is that some or all of these units (also referred to as suites or apartments) are rented to tenants on a short or long-term basis. The homeowner may live on-site or use the home as a dedicated investment property.

Looking for general home-buying advice? Start with these related blog posts.

Why Are There So Many in West Toronto?

Understanding why multi-family homes are so prominent in West Toronto begins by taking a look at their advantages.

Toronto’s west end is home to some of the most sought-after neighbourhoods for renters in all of the GTA. Many homeowners have capitalized on this demand by adding for-rent units to their property, earning a healthy volume of passive income each month.

Another reason for the prominence of multi-family homes is a local uptick in multi-generational living. With separate living spaces in one shared building, multi-family homes provide unique opportunities for families to live close together – without feeling like roommates.

Want to get a sense of what’s available in today’s market? Click here to browse our current selection of listings.

Are They a Good Fit For You?

A somewhat unique type of property, multi-family homes have plenty of advantages. However, they’re not for everyone. Let’s weigh the pros and cons.

The Perks

Extra Income: One of the biggest perks of owning a multi-family home is the potential for earning passive income. With separate units already built into the property, you can live in the one that best suits your needs, and then rent out the remaining ones. Given the red-hot state of West Toronto’s rental market, property owners are able to bring in some pretty impressive returns.

Given the elevated costs of housing faced by today’s generation, many first-time home buyers in particular have found it helpful to have an additional stream of income to use towards their mortgage.

If this appeals to you, buying a multi-family property could be a good fit.

Multi-generational Living: As the costs of housing continue to rise in Toronto, multi-generational living has become a reality for many families. With that in mind, multi-family properties can make a great fit for these kinds of living arrangements.

If hosting parents, inlaws, or other family members on your property is part of your long-term goals, buying a multi-family home could work well.

In addition to hosting family members, having a smaller suite on your property could make for the perfect place for you to downsize. Down the line, having a smaller living space to move into already lined up can make it much easier to transition into your next chapter.

Searching for a home for you and your family? Check out these related blogs.

Potential Drawbacks

While there are plenty of advantages to owning a multi-family home, there are a few things to consider before you buy.

For example, if you intended to rent out one (or more) of the suites, you’ll take on certain landlord responsibilities. This could include finding and vetting tenants, collecting rent, looking after repairs and maintenance, and staying up to date on the various legalities of being a landlord. Additionally, hosting tenants will also add a few extra steps if you choose to sell down the line.

Speaking generally, these duties are far from a full-time job. With the right coaching from a real estate agent or professional property manager, you can enjoy an easy, stress-free landlord experience.