March 6, 2023

Owning and Occupying a Plex: The Pros and Cons

In our highly competitive real estate market, those hoping to own a home of their own face many challenges, so they have to be creative if they want to realize their dream. In this context, owning and occupying a plex may be an option that merits serious consideration. In this article, learn about the most profitable types of properties as well as the pros and cons of this solution.


1. Owner-occupant: what exactly are we talking about?

An owner-occupant refers to someone who acquires a plex or building of five units or less who also resides there. In this situation, the owner-occupant earns income by renting out the other rental units. The rental income thus helps pay for the mortgage, property taxes and maintenance work.

The minimum down payment to buy a plex is generally 5% to 10%, which is lower than that of a single-family home[1]. However, various factors influence how much down payment will be needed, such as the number of units and the building’s value. In some cases, you may have to take out mortgage insurance from the Canada Mortgage and Housing Corporation (CMHC). Ask your financial advisor or mortgage broker for all the details and make an informed decision based on your reality.

2. Best properties for owner-occupants

Buying a plex may not always be a lucrative investment or suitable for all lifestyles. The property’s financial profitability and size – just like your debt ratio – can have a significant impact on your decision.[2].

Building size

Becoming an owner-occupant is perhaps more straightforward if you buy a duplex or a triplex, since properties with more units involve greater responsibilities and more risk of being disturbed by your tenants.


Profitability is undoubtedly the deciding factor when it comes to choosing a property to own and occupy. To assess its profitability, calculate the net return on your investment by taking into account the various associated costs: property and school taxes, non-recoverable expenses, management fees, rental income taxes, etc.[3]. You will then be able to determine how much rent you will need to charge to cover the expenses.

3. Comparing the pros and cons

Think carefully before getting involved in purchasing a plex!  Weighing the pros and cons is a productive exercise that will help you see if this is right for you[4].


Owning and occupying a property will allow you:

  • to become a homeowner.
  • lower your minimum down payment.
  • pay off your mortgage faster thanks to the rent you collect.
  • take advantage of some tax-deductible expenses.


By living near your tenants, you will need to:

  • settle for less peace and quiet, due to noise and disturbances.
  • ensure your tenant’s right to the peaceable enjoyment of their apartment.
  • respond to their requests.

In short, the financial benefit alone cannot justify this type of investment. So, don't forget to think about how it will affect your lifestyle.

4. Repossession

As owner-occupant, you have to respect certain obligations. This implies that your tenants will be able to continue to occupy their unit so long as they comply with all the conditions of the lease.

What if you want to take over one of the apartments to live in it? While not impossible, you do have to follow a strict procedure and serve a Notice of Repossession within a specific time frame which takes into account the duration of the tenant's lease.

However, in some cases, you will not be able to repossess the unit. This is the case if the tenant[5] :

  • is over 70 years old.
  • has occupied the apartment for more than 10 years.
  • has an income that does not allow them to benefit from low-rent housing.

In addition, the owner who wishes to repossess the unit must be over 70 years old.

In short, becoming an owner-occupant could allow you to find housing at a lower cost. In some cases, the income generated by the rents is even sufficient to cover the entire mortgage and expenses associated with the maintenance of the building. Although this scenario may be your dream, unfortunately, it is not always realistic.

Consult your financial advisor for a more accurate assessment. Then contact a real estate broker who will help you make your project a reality.

See also:

Back top