New member in Canada, thinking of jumping into a quadplex and house hacking

[Charles Lambert]

I've lurked on this forum now and then over the years, and even listened to the podcast for a while. I've finally registered for the forum and started listening to the podcasts again. Everything seems very overwhelming, but as I get closer to retirement, and thinking of what little I have saved and the way the economy is going, I need to do something now, proactively, rather than reactively when things go sideways.

Currently, I have a SFH in a nice area (in the Okanagan Valley in BC, which means "Bring Cash" lol), it's worth about $850k, I owe about $200k, bought it a few years before the pandemic. In the next one to three years, I will sell it and move to an area with a lower cost of living. Selling right now is not a good time, for many reasons, but I'm already getting the house ready to sell so it will be quicker when the time comes.

For the last few years, I've been looking at real estate listings across Canada, originally at SFH in the suburbs and rural areas, as I really wanted to have a nice, small house with lots of land and no neighbors close by. But, the economic reality of things looks like it will be much better to buy a duplex, triplex or a quadplex and house hack and live in one of the units while renting out the other(s). It will likely end up being a red brick building built between 1920 and 1960, as that's what most of the housing stock for plexes looks like in the cities I've been checking.

The only thing that worries me is that the ages of the buildings I can afford (because I want to do it without financing so I minimize the amount of monthly payments I have). I've been in some of these buildings that are close to, or over a century old and as quaint as they can be, sometimes you are just hit by the smell of mustiness and mold. Long ago, I actually rented a one bedroom apartment in a red brick quadplex built around 1920, I was on the top floor, and the flat roof started to leak in the closet, didn't notice it right away until I had respiratory issues. I don't want to go through that, or have tenants go through it, or be stuck with a money pit of an old building that needs never ending repairs.

I was surprised that for the price of a nice SFH, or just a bit more, I can get a multi-unit building in some cities, and some look more promising than others. Some have one or two commercial units, which is interesting. Commercial tenants are usually more stable and sign longer leases, so there's that. Some are purpose built buildings, others are SFH converted into multi-unit properties.

The idea of more units is both appealing and worrisome. Better, because more tenants paying rent, so more income and if there's a vacancy, better to have one out of four units vacant (25%) verses one of the two unit vacant (50%). But, that also means more tenants to manage and I don't think I'll be very good at that, so either way, I will probably hire a property manager to screen the tenants and collect rent, etc.

Another potential benefit I see with a triplex, or especially a quadplex is that they tend to be purpose built as small apartment buildings (though not always). As opposed to some duplexes which are single family homes that were converted into apartments. My impression is that something purpose built is going to be better, possibly built to higher commercial standards (most just "look" commercial with their flat roofs, separate electrical meters, etc). Soundproofing might be better too.

Feel free to give me any tips or suggestions.