Buying a small plex (a duplex, triplex, etc.) can be a good way to earn solid returns. This guide helps you understand the basic steps of investing in real estate, from the down payment to profitability, so you can make the most of your investment this year.
What is a plex?
A plex is a building with multiple residential units—usually a duplex, triplex, or fourplex. It generates rental income and tends to be easier to manage than a large apartment building.
Why invest in a plex?
A small plex (such as a duplex or triplex) offers several advantages for investors, including relatively low financial risk, easier management, and the potential of covering your mortgage payments with rental income.
It’s a particularly good option for those looking to break into rental real estate with a smaller up-front investment. With one or two additional rental units, you can reduce vacancy risk and create more stable monthly income. A small plex also keeps things more manageable, since you’re dealing with a smaller property and not a large building with many tenants.
The market for rental properties has been very favourable in 2025, especially for smaller units, which are increasingly in demand due to the growing need for affordable housing. Small plexes offer solid growth potential. When located in sought-after neighbourhoods and with simpler day-to-day management, they can deliver strong long-term rental returns.
Smart strategies for investing in real estate in Quebec
Ready to take the plunge and invest in a plex to start building your wealth? Here are a few tips to help you make good decisions and avoid common mistakes. Of course, every situation is different, and the most reliable advice will come from a mortgage broker who can tailor their guidance to your profile, goals and strategy.
Calculate your borrowing capacity and the return on your plex
It’s great to dream big, but the first step is figuring out what you can actually afford. This will shape your project and help you narrow down the type of property you can realistically buy. A good place to start is calculating your borrowing capacity.
Once you have an idea of your borrowing capacity and a potential plex catches your eye, it’s time to do a detailed financial analysis.
Check whether the rental income will cover your mortgage payments, and look into any renovations that might be needed. If the building needs major upgrades, it will affect your budget and timeline.
A duplex typically requires less management, but tends to offer lower returns than a triplex or fourplex.
Plan for annual expenses
While real estate is generally considered a low-risk investment, there are several recurring costs to keep in mind, such as municipal taxes, school taxes, and the property transfer tax. The good news? Rental income can often offset many of these expenses. When you keep in mind that your rental income helps cover costs like school taxes and the transfer tax, those expenses start to feel much more manageable.
Invest in an up-and-coming neighbourhood
Take the time to research any neighbourhoods you’re considering. Look into rental demand and long-term property value trends to get a picture of the area’s potential. A good location can make a huge difference in the success of your investment. Once you have all the basic information, map out different scenarios based on key factors like interest rates, costs, and inflation.
Buying a plex is a lot like running a small business—but unlike a typical investment, your down payment won’t generate immediate profits. Patience is key.
How do you calculate the return on your investment?
To calculate your annual return, subtract your operating expenses (including mortgage interest) from the rental income, then divide that amount by your down payment. To make sure the investment is profitable, check that your return is higher than your mortgage rate.
For example: Let’s say you buy a duplex for $300,000 with a 20% down payment ($60,000). Let’s also say you earn $24,000 a year in rental income, and your operating expenses (including mortgage interest) come to $18,000 a year. The annual gross return would be:
So, the investment would be profitable if your mortgage rate is below 10%.
What’s the minimum down payment required to buy a plex?
The requirements for buying income properties vary depending on the number of units and whether you plan to live in the building. Let’s look at the different cases.
Down payment for a duplex
If you plan to live in one of the units, the minimum down payment is 5% of the property’s value. You’ll need to add 10% on any amount over $500,000. If the duplex is for rental purposes only, the minimum down payment is 20% of the purchase price.
Down payment for a triplex or fourplex
If the property is strictly a rental, the minimum down payment will be 20%. If you plan to live in one of the units, you’ll need to put down at least 10% of the property’s value.
Down payment for a plex with five units or more
For a property with five or more units, the minimum required down payment is 15%, whether or not you intend to live in one of the units.
Increase your down payment with subsidies
Saving up for a down payment to invest in a plex can be a real challenge, especially if you don’t want to take out mortgage loan insurance. Luckily, there are several programs and tax credits available to help first-time buyers increase their down payment. Already a homeowner? You may still be eligible for certain subsidies.
Rental property profitability in 2025
In 2025, rental profitability continues to be influenced by a mix of economic factors.
Location, interest rates, and rental demand all affect how much return you can expect from your investment. These factors will continue to play a major role in determining returns in 2025.
Smaller plexes like duplexes and triplexes continue to stand out as great options for investors. They tend to generate steady income while being easier to manage than larger multi-unit buildings.
Rental returns in 2025 vary widely depending on the location and condition of the property. As a general rule, high-demand areas offer stronger returns.
Get the best rate for your plex purchase
Whether you’re a first-time investor or have more experience, our brokers can help you assess the recurring costs of owning a small plex—like property taxes, home insurance and maintenance—to maximize your return. With our transparent approach and deep knowledge of the Canadian real estate market, we provide guidance that’s tailored to your profile and financial goals.
Need more details on the annual costs for your small plex? Talk to a Multi-Prêts expert today to get a full estimate.
Key takeaways
- A duplex requires less management but generally offers a lower return than triplexes and quadruplexes.
- The down payment needed to buy a plex varies depending on the number of units and whether you plan to live there.
- Investing in a multi-generational home carries higher risk.