Multiplex ROI in British Columbia: What Returns to Expect
A practical guide to calculating multiplex returns, benchmarking by city, and understanding the factors that separate profitable projects from marginal ones.
How to calculate multiplex ROI
The most meaningful metric for multiplex investors is Return on Equity (ROE) -- the profit you earn relative to the cash you put in. Here is the formula and a worked example:
ROE = (Total Revenue - Total Cost) / Equity Invested x 100
Example: East Vancouver fourplex
- Land (owned): $2,100,000
- Construction: $2,000,000
- DCL + permits: $200,000
- Soft costs: $350,000
- Contingency: $200,000
- Total cost: $4,850,000
Revenue and return
- 4 units sold at $1,450,000 each
- Total revenue: $5,800,000
- Profit: $950,000
- Equity invested: $2,100,000 (land)
- ROE: 45% (on existing land)
- Or ~19.6% ROE if land was purchased with project
The distinction between owning land and purchasing it is critical. Homeowners who already own the lot invest less cash, resulting in dramatically higher ROE. Investors who must purchase land see lower ROE but still strong absolute returns.
ROI benchmarks by city
Returns vary significantly across BC, driven by the ratio of land cost to unit sale prices and construction costs. Here are current ranges for build-to-sell fourplexes:
| City | Avg. Land Cost | Total Project Cost | Total Revenue | ROE Range |
|---|---|---|---|---|
| Vancouver (East) | $2.0-2.5M | $4.5-5.5M | $5.5-6.5M | 12-18% |
| Vancouver (West) | $3.0-4.5M | $6.0-8.0M | $7.0-9.0M | 10-14% |
| Burnaby | $1.8-2.5M | $4.0-5.2M | $5.0-6.2M | 14-20% |
| Surrey / Langley | $1.2-1.8M | $3.0-4.0M | $3.6-4.8M | 14-22% |
| Coquitlam | $1.5-2.2M | $3.5-4.5M | $4.2-5.4M | 14-20% |
| Squamish | $1.0-1.5M | $2.8-3.8M | $3.4-4.5M | 12-18% |
| Kelowna | $0.8-1.3M | $2.5-3.5M | $3.0-4.0M | 14-20% |
These ranges assume land is purchased at market value. Homeowners who already own the lot can expect significantly higher ROE (often 30-50%+) because the land cost is already sunk equity.
The five factors that determine multiplex profitability
Land cost as % of total project
When land represents more than 55% of total project cost, ROE drops below 12%. The sweet spot is land at 40-50% of total cost. This is why Surrey/Langley often outperform Vancouver on ROE despite lower sale prices.
Unit count
More units on the same lot spread the land cost across more doors. A sixplex on a $2M lot has a land cost of $333K/door vs. $500K/door for a fourplex. This 33% reduction in per-unit land cost directly flows to the bottom line.
Construction cost control
Experienced multiplex builders can achieve 5-10% cost savings through standardized designs, volume material purchasing, and efficient trade scheduling. A $150K saving on a $2M build directly adds to profit.
Timeline execution
Every month of delay costs $8,000-$15,000 in carrying costs (construction loan interest, property taxes, insurance). A 3-month delay can reduce ROE by 2-4 percentage points.
Exit strategy alignment
Build-to-sell maximizes short-term ROE but incurs selling costs (commissions, GST). Build-to-rent delivers lower initial returns but builds long-term wealth through appreciation and mortgage paydown. Choosing the right strategy for your goals matters more than squeezing an extra 1% ROE.
Build-to-sell vs. build-to-rent returns
Build-to-sell
- ROE: 10-22% (one-time)
- Timeline: 18-24 months to full return
- Pros: Quick capital recycling, known exit price
- Cons: GST on new builds, selling commissions (3-5%), taxable profit
- Best for: Investors who want to reinvest capital into the next project
Build-to-rent
- Cash-on-cash: 5-8% annually
- Appreciation: 2-4% per year
- Pros: Ongoing income, tax advantages, CMHC financing
- Cons: Capital locked up, management responsibility
- Best for: Long-term wealth builders, passive income seekers
FAQs
What ROI can I expect from a multiplex in BC?
Build-to-sell ROE ranges from 10-22% depending on city. Vancouver averages 10-16%, Surrey/Langley 14-22%. Build-to-rent yields 5-8% cash-on-cash with 2-4% annual appreciation.
How do you calculate multiplex ROI?
ROE = (Total Revenue - Total Cost) / Equity Invested x 100. Total cost includes land, construction, DCL, soft costs, financing, and contingency.
What factors most affect multiplex ROI?
Land cost as % of total project, unit count (more units spread costs), construction cost management, timeline execution, and exit strategy selection.
Is multiplex ROI better than other real estate investments?
Yes, multiplex development typically outperforms buying existing rentals (3-5% cap rates) and condo flipping (5-10% margins), though it requires more capital, time, and risk tolerance.
Calculate your property's ROI
Enter any BC address for a personalized ROI analysis based on your lot's actual data and current market conditions.