For investors
Multiplexes built to hold. Budgets built to perform.
Oaksmith designs and builds purpose-built rental multiplexes for investors who plan to keep them. We underwrite the numbers first, find a lot that supports them and design every unit to rent well. Every budget we put in front of you is set to clear a 6% cap rate on all-in cost.
The 6% standard
A floor every budget has to clear.
Before we draw a single plan, we model the project. If the numbers can't reach a 6% cap rate on the full cost of the project, land included, we change the lot, the unit mix or the scope until they do. If nothing gets there, we tell you to walk away.
A year's rent, less vacancy and operating costs: property tax, insurance, maintenance, management and reserves.
The lot, construction, design and permits, development charges, financing and contingency.
The cap rate on all-in cost, also called yield on cost: what the building earns on every dollar it took to create.
- Numbers before drawingsYou see the pro forma before you pay for design.
- Built from real figuresRent comparables for each unit type and construction costs from trade quotes.
- Re-tested at every changeAny change in design or scope is checked against the 6% floor before it's approved.
Rents, vacancy and operating costs are market estimates, so no one can guarantee them. We show you every assumption, and we test the numbers against lower rents and higher costs before you commit.
The missing middle
The homes the GTA is shortest on.
The missing middle is the housing between detached houses and apartment towers: triplexes, fourplexes, sixplexes and low-rise walk-ups. Family-size rentals in established neighbourhoods are scarce, and tenants who find one tend to stay.
- Two- and three-bedroom units for families and sharers
- Ground-oriented homes close to schools, shops and transit
- Longer tenancies and less turnover than small units
Zoning has caught up
Rules differ by municipality and by lot. We confirm what yours allows before anything else.
How we work
Five steps that protect your numbers.
The order matters. The pro forma comes first, and every step after it has to keep the project above the 6% floor.
- Before any design
Underwrite the project
Rent comparables for every unit type, a full operating budget and a stress test against lower rents and higher costs.
You receiveA pro forma and the most you can pay for a lot
- Before you buy
Find the lot
We review zoning, frontage, services, trees and transit on every lot you're considering, and run each one through the pro forma.
You receiveA shortlist of lots that clear 6%
- During design
Design the units
Unit sizes, mix and layouts planned around the rents the area supports, with stacked plumbing, separate meters and efficient floor plates.
You receivePlans, a unit mix and a projected rent roll
- Before permit
Set the budget
A line-by-line construction budget built from trade quotes, with contingency, matched to the pro forma.
You receiveA budget that clears the 6% floor
- Under 12 months from permit
Build and hand over
Construction managed by Oaksmith, so rent starts sooner and carrying costs stay low. You receive a building that's ready to lease.
You receiveKeys, a building manual and a lease-ready building
Test a lot
What can you pay for a lot and still clear 6%?
Move the sliders to see how rents, building costs and the price of the lot change the return. The figure at the bottom is the most you can pay for a lot and still clear 6%, and it's where our lot search starts.
| Annual rent 6 units × $3,300 × 12 | $237,600 |
|---|---|
| Less vacancy, 3% | −$7,128 |
| Less operating costs, 15% | −$34,571 |
| Net operating income | $195,901 |
| Lot | $900,000 |
| Construction 5,712 sq ft × $300 | $1,713,600 |
| Design, permits and fees, 8% | $137,088 |
| Financing and contingency, 5% | $85,680 |
| All-in cost Excluding HST | $2,836,368 |
Illustrative only, not financial advice. Assumes a purpose-built rental of four to six units, 12% added for stairs, walls and common areas, design, permits and fees at 8% and financing and contingency at 5% of construction, 3% vacancy, and operating costs at 15% of collected rent with tenants paying their own hydro. All costs exclude HST. Your pro forma uses real rent comparables, trade quotes and your financing.
Finding the right lot
We look at a lot the way a lender and a tenant will.
The price of the lot decides more than anything else whether a multiplex clears 6%. We review every lot you're considering against the pro forma, and we look for the hidden costs that sink deals: undersized services, protected trees and zoning that needs a variance.
Already own a lot? We use its current market value in the pro forma, so you see the real return on the property, not only on the new money.
- Frontage and depthRoom for two units per floor and the setbacks zoning requires.
- Units permittedWhat zoning allows as of right, and whether a variance is worth pursuing.
- Water and sewerWhether existing services can carry six units, or need a costly upgrade.
- TreesProtected trees that can shape, or shrink, the building.
- TransitFrequent transit within walking distance supports rents and reduces parking needs.
- Lane, bikes and binsSpace at the back for storage, and on some lots a garden suite.
Designing for return
Every square foot earns its keep.
Rent is paid by the unit, but construction is paid by the square foot. We design to the sweet spot: units sized and laid out for the rents your area supports.
Unit mix matched to demand
Two- and three-bedroom family units where they rent best, and one-bedroom-plus-den units where they don't.
Efficient, stacked plans
Units and plumbing stacked floor to floor around a compact central stair, with little wasted corridor.
Separate meters
Each unit on its own hydro meter and heat pump, so tenants pay for what they use.
In-suite laundry and storage
The features tenants filter for first, and the ones that keep them renewing.
Quiet and durable
Sound-rated floors and walls between units, and finishes that stand up to turnover.
Efficient to run
A tight envelope and heat pumps keep operating costs down and can earn CMHC financing points.
Most multiplexes we design stay within Part 9 of the Ontario Building Code (up to three storeys and a 600 m² footprint), which keeps engineering and construction simpler.
Incentives and financing
Programs that move the numbers.
We design to qualify for the programs that cut costs and improve financing, and build them into your pro forma.
- GST/HST rebates on new rentalPurpose-built rental buildings with four or more units can qualify for a full rebate of the federal GST, and Ontario has its own temporary rebate of the provincial portion. The federal rebate requires construction to start before 2031.
- CMHC MLI Select financingFor five or more units: loans of up to 95% of cost and amortizations of up to 50 years, earned with points for energy efficiency, accessibility and affordability.
- Development charge reliefSome additional units on residential lots are exempt from development charges, and purpose-built rentals can qualify for reductions.
- As-of-right zoningWhere zoning already allows your unit count, you skip the rezoning and go straight to a building permit.
Programs change. We confirm the current rules for your project with your accountant and lender before they go into the pro forma.
Questions
What investors ask us first.
Can you guarantee a 6% cap rate?
We guarantee our standard: every budget we present is set to clear 6% on all-in cost, using real rent comparables and real quotes, and we tell you early if a project can't. Rents, vacancy and operating costs depend on the market, so no builder can guarantee the return itself. We show you every assumption so you can judge it.
What if my lot doesn't clear 6%?
We show you what would: more units, a different mix, a lower purchase price or a simpler building. If nothing gets there, we'll tell you before you spend money on design.
How many units can I build on my lot?
It depends on the municipality and the lot. Ontario allows three units on most residential lots, Toronto and Mississauga allow four, and nine Toronto wards allow six. We confirm what your lot allows, and whether a variance is worth it, before anything else.
Can I build on a lot I already own?
Yes. We count the lot at its current market value, so the pro forma shows the real return on the whole property. It's often the strongest starting point, because there's no purchase to finance.
Do you help with financing?
We prepare the drawings, budgets and energy targets your lender needs, including for CMHC MLI Select, and work alongside your mortgage broker.
Do you manage the building after it's built?
Property management isn't part of our service. We hand over a lease-ready building with its manuals and warranties, and we're still your contact for anything about how it was built.
Start with a lot
Send us a lot. We'll tell you if it clears 6%.
Share an address or a listing. Sami will run it through the pro forma and tell you what it can earn, and what it would take to clear the floor.
Book an investor consultationsami@oaksmith.ca