Cap rate basics, rental income potential, parking per unit, how to verify all suites are legal, conventional vs commercial financing, and a complete due diligence checklist — from an agent who has transacted multi-family in Metro Vancouver for 36 years.
By Les Twarog | Licensed since 1988 | RE/MAX Crest Realty, Vancouver
A fourplex (4 units) or triplex (3 units) represents the upper end of residential-scale multi-family investment in Canada — the last rung before the ladder shifts to commercial financing. This makes it an exceptionally strategic asset class for individual investors:
Fourplex investing in Metro Vancouver is primarily a long-term wealth strategy. With cap rates of 3.5–4.5%, most fourplexes do not cash-flow positively in the first few years at current purchase prices. The investment thesis is total return — income + appreciation — not immediate monthly cash flow.
Cap rate = Net Operating Income (NOI) ÷ Purchase Price × 100
NOI = Annual Gross Rent − Operating Expenses (property tax, insurance, maintenance, vacancy allowance, management fees)
GRM = Purchase Price ÷ Annual Gross Rent. A fourplex at $2M with $100,800 in annual gross rent has a GRM of 19.8. Lower GRM = better value. Metro Vancouver fourplex GRMs typically range from 16 to 24, with well-priced properties trading at 18 or below.
Sellers often present optimistic "market rent" projections rather than current actual rents. If long-term tenants are paying below-market rents under BC's rent control regime, it may take years for rents to reach market rates. Always request actual signed leases and last 12 months of deposits, not just a rent roll with projected figures.
Metro Vancouver's fourplex stock is largely pre-1980 construction, built during a period of active multi-family zoning before densification was restricted. Typical configurations:
Two up-down duplexes side by side, each with a main-floor suite and a basement suite. Common in Burnaby's Edmonds, Heights, and South Slope areas. Each pair of units shares a party wall and often shares a roof structure. Units are typically 700–900 sqft per suite.
A taller building with two main-floor/second-floor units and two basement units. Common in East Vancouver. Upper units typically have better natural light; basement units command lower rents. Some stacked fourplexes have been converted from single-family homes — verify that all units are permitted.
Post-2010 construction, often enabled by rezoning or pre-SSMUH variances. These buildings typically have separate heating, electrical, and plumbing per unit, modern electrical (200 amp per unit), and better parking arrangements. They command higher rents and require significantly less deferred maintenance than older stock.
Beginning in 2024, new fourplexes are being built on previously single-family lots across Metro Vancouver. These new-build fourplexes are designed to modern code — separate panels, proper insulation, no illegal suite concerns — and will increasingly compete with older stock as more come to market over 2025–2027.
Parking in a fourplex context is one of the most material factors affecting tenant quality and rental income:
Whatever the parking configuration, ensure every tenant's lease explicitly assigns their stall (or states no parking is included). Ambiguity around parking is the #1 cause of tenant-to-tenant disputes in multi-family buildings. Disputes that escalate to the BC Residential Tenancy Branch cost landlords time and create vacancy risk.
In a fourplex, you are buying four separate living spaces. The legal status of each unit matters independently. The verification process:
A fourplex with one or more non-permitted suites may be difficult or expensive to insure as a multi-family property. Some insurers will refuse coverage or require the non-permitted units to be closed before issuing a policy. Always confirm insurance eligibility before removing subjects — contact your commercial property insurer directly with the full permit situation.
Under Canadian mortgage regulations, properties with 1 to 4 residential units qualify for residential mortgage financing — including CMHC-insured mortgages (when owner-occupied and under certain price limits). A 5-unit building or larger crosses into commercial financing territory, with fundamentally different loan terms:
| Feature | Residential (1–4 units) | Commercial (5+ units) |
|---|---|---|
| Max amortization | 25–30 years | 15–25 years |
| Rate premium | Standard residential | +0.25–1.0% over residential |
| Qualification basis | Personal income + rental offset | DSCR (debt service coverage ratio) |
| Min down payment | 20% (investment); 5% if owner-occupied | 25–35% |
| Lender options | Banks, credit unions, B-lenders | Specialized commercial lenders |
If you live in one of the 4 units, some lenders and CMHC will treat the purchase with more favourable terms — including potentially lower down payment requirements and higher rental income inclusion ratios. This owner-occupant strategy can significantly reduce your financing costs versus an all-investment approach.
Before removing subjects on a fourplex, verify every item on this list:
BC's Small-Scale Multi-Unit Housing legislation has a meaningful impact on the fourplex market. Under SSMUH, any standard residential lot in a qualifying municipality can now support up to 4 units by right — without rezoning. This means:
Read the full BC SSMUH Guide for a deep dive into what the legislation means for multi-family buyers and investors.
Cap Rate = NOI ÷ Purchase Price × 100. NOI = Annual Gross Rent − Operating Expenses (property tax, insurance, maintenance, vacancy allowance, management). A Burnaby fourplex at $2.7M generating $108,000 NOI has a 4.0% cap rate. Metro Vancouver fourplex cap rates typically range from 3.0% to 5.5%. Cap rate does not account for financing costs — it is a property-level metric, not a buyer-specific return.
Older Metro Vancouver fourplexes commonly have 2–3 open stalls shared among 4 units. Newer buildings target 1 stall per unit. Near frequent transit under SSMUH, no parking may be required. From a tenant quality and rent perspective, 1 dedicated stall per unit is ideal; shared pads are workable if clearly assigned in leases; no parking limits tenant pool significantly away from transit.
Request a full building permit history from the municipality. Check BC Assessment (legal fourplex = "multi-family" classification). Verify BC Hydro meter count (4 meters = 4 legal units). Have a multi-unit inspector check electrical panels, fire separation, and code compliance. Include a subject-to-permit-review clause in your offer.
Both triplexes and fourplexes qualify for residential mortgage financing (1–4 units). A 5-unit building requires commercial financing with shorter amortization, higher rates, and DSCR-based qualification. For investment fourplexes (non-owner-occupied), minimum 20% down is required. Owner-occupied fourplexes may qualify for more favourable terms including CMHC insurance.
In Burnaby and Vancouver, typical cap rates are 3.0–5.0%. A 3.5–4.0% cap rate is standard for a well-maintained, fully rented Burnaby fourplex. Higher rates (4.5–5.5%) are achievable for older, lower-priced properties or outer suburbs. In land-value-driven Metro Vancouver, many investors accept below-average cap rates for the appreciation potential of the land.
Signed leases for all units, actual rent roll (not projected), 12 months of deposit records, municipal permit history, BC Assessment, Hydro meter count, electrical panel inspection, multi-unit inspection report, insurance certificate, title search, 3 years of property tax statements, and disclosure of any Tenancy Branch proceedings.
SSMUH legitimizes 4-unit residential density broadly, making the fourplex format more recognized. New supply from SSMUH-enabled builds competes with older stock over time. However, existing income-producing fourplexes with all-legal units retain strong value because they produce rental income immediately without permitting and construction delays. Land value component benefits from SSMUH density confirmation.
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