What cap rate should I expect on an Ottawa fourplex?

This desk’s Ottawa screen is 4.3%–5.6% going-in on small multifamily. Confirm NOI from rents and expenses, not the brochure cap. Neighbourhood and condition move the print.

Is ask per door a better screen than cap rate?

They answer different questions. Ask per door ($275k–$475k in Ottawa) compares basis. Cap rate compares unlevered yield. A cheap door with a thin cap is still a thin cap.

Does a fourplex in Ottawa get MLI Select?

No. MLI Select requirements start at five residential units. Underwrite an Ottawa fourplex on conventional terms and the qualifying-rate DSCR.

Cap rate on an Ottawa fourplex

Cap rate is NOI divided by purchase price. On Ottawa fourplexes this desk screens about 4.3%–5.6% going-in, with ask per door around $275k–$475k. The listing’s advertised cap is often seller NOI. Recast it from the rent roll before you offer.

The arithmetic

Cap rate = net operating income ÷ purchase price. NOI is in-place (or conservative market) rent minus vacancy, taxes, insurance, utilities you pay, management, and a real repair reserve — before the mortgage. A 4.8% cap on a $1.2M fourplex means about $57,600 of NOI. If the listing shows 6% and the T12 does not, believe the T12.

What Ottawa fourplexes usually clear

The Ottawa screen on this desk is 4.3%–5.6% for small multifamily, and $275k–$475k ask per door. A Hintonburg or Westboro fourplex often sits at the tight end of that band. Vanier and inner-east product can print a higher cap because the building or the street is doing more work. Street, condition, and in-place vs market rent move the number more than the city average.

Fourplex financing is conventional

An Ottawa fourplex is four legal units. That is residential / conventional leverage, not MLI Select. You still underwrite DSCR at the qualifying rate — the higher of contract plus 2% or 5.25%. A deal that looks cheap on cap can fail the lender screen once you put a real down payment and the stress-test payment on it.

Cap rate is not the offer

Cap ignores debt, capex, and vacancy timing. Use it to compare buildings in the same city. Use DSCR and cash-on-cash to decide whether you can hold it. If you need the fifth unit to make the stack work, you are no longer underwriting a fourplex.

Questions

What cap rate should I expect on an Ottawa fourplex?: This desk’s Ottawa screen is 4.3%–5.6% going-in on small multifamily. Confirm NOI from rents and expenses, not the brochure cap. Neighbourhood and condition move the print.
Is ask per door a better screen than cap rate?: They answer different questions. Ask per door ($275k–$475k in Ottawa) compares basis. Cap rate compares unlevered yield. A cheap door with a thin cap is still a thin cap.
Does a fourplex in Ottawa get MLI Select?: No. MLI Select requirements start at five residential units. Underwrite an Ottawa fourplex on conventional terms and the qualifying-rate DSCR.

Open the Ottawa market file

Analysis for information only. Not lending, tax, legal, or investment advice. Confirm current CMHC and OSFI rules with a licensed advisor.