"3 Is Free": Triplex House Hacking in Uxbridge and Durham Region

by Erik Jacobsen

When people ask me about multiplex investing, I usually answer with my motto: "3 is free." The idea is simple. Buy or create a property with three units, live in one, and rent the other two. If the numbers line up, the rent from those two units can cover much of the cost of the one you live in. That's house hacking, and a triplex is where it gets interesting.

It's a philosophy, not a promise. Some triplexes come close to "free" and some don't. The point is to make sure you know which one you're looking at before you buy. My team and I help buyers and investors find and evaluate multi-unit and conversion properties across Uxbridge, Stouffville, Brock, Ramara, Georgina, Orillia and Durham Region. Here's how I think about it.

This is general information, not legal, tax or financial advice. Rules vary by municipality and property. Talk to your lender, accountant and local planning and building department before you buy.

What does "3 is free" actually mean?

With one unit, you carry the whole cost of the home. With three units, you split that cost three ways and the tenants in two of them help carry it. Mortgage, property tax, insurance, utilities and maintenance don't disappear. They just get shared by more rent cheques.

"Free" is the goal, not the guarantee. How close you get depends on purchase price, financing, rents, expenses, vacancies and how well the property is run.

Why are triplexes more realistic in Ontario now?

In 2022, Ontario passed Bill 23, the More Homes Built Faster Act. According to the province's Environmental Registry notice, it allows up to 3 residential units per lot "as-of-right" in many existing residential areas. That can be three units in the main house, or two in the house plus one in an outbuilding such as a garage or garden suite.

The key fine print:

It applies to residential lots in settlement areas served by full municipal water and sewage.
It does not automatically apply to lots on private well and septic, or to some lands such as parts of the Greenbelt outside serviced settlement areas.
Units still have to meet the Ontario Building Code and fire code. You also need building permits.
Municipalities can't require more than one parking space per unit or set minimum unit sizes for these as-of-right units.

In our area, that distinction matters. A home in a serviced part of a town may qualify. A rural home on well and septic usually falls under local zoning instead, and septic capacity can be the deciding factor.

How does the math work? (Illustrative example)

The figures below are placeholders, not real rents, prices or costs. They only show the shape of the calculation. Use real quotes, real comparable rents and real financing from your lender.

Line item	Example (placeholder)
Monthly cost to own (mortgage, tax, insurance, utilities, maintenance, vacancy reserve)	A
Rent from Unit 2	B
Rent from Unit 3	C
What you pay to live in Unit 1	A − (B + C)

If B + C is close to A, you're near "3 is free." If it's far below, you're still house hacking, just at a discount instead of for free. If the result only works with best-case rents and zero vacancy, it doesn't work. Run your real numbers with a lender and an accountant, including how rental income is treated for qualifying and for tax.

Buy an existing triplex or convert a house?

Existing legal triplex: less renovation risk and rents you can verify, but you inherit the tenants, the leases and the condition. Confirm the units are legal and permitted.

Converting a house: you may find better value, but you take on design, permits, construction and the surprises older homes hide (old wiring, plumbing or drainage issues). Get contractor and designer quotes before you buy, not after, and build in a contingency.

What makes a property a good triplex candidate?

On municipal water and sewer, in a zone that permits additional units.
A layout that splits cleanly, with room for separate entrances.
Basement ceiling height and window sizes that can meet code for egress.
Space for parking and, if relevant, a garage or garden suite.
Strong rental demand in the town for the unit sizes you'd create.

Why does a legal unit matter so much?

A permitted, inspected unit is easier to insure and finance, safer for tenants and more valuable when you sell. An unpermitted unit can create problems with insurance, financing and resale. With "3 is free," legal comes first. Shortcuts here can wipe out the whole idea.

What about being a landlord?

House hacking means your tenants are also your neighbours. Ontario tenancies are governed by the Residential Tenancies Act. Learn your obligations before you sign a lease, and decide whether you'll manage the units yourself or hire a property manager.

When to think twice

The lot is on a septic system that may not handle more bedrooms.
The budget relies on everything going right.
You're not ready to share a building with tenants or be a landlord.

FAQ

What is house hacking? Living in one unit of a multi-unit property and renting the others, so the rent helps cover your housing costs.

Can I have three units on my lot in Ontario? On many lots in serviced settlement areas, yes. Bill 23 allows up to three units as-of-right. Lots on private well and septic generally don't qualify automatically. Check with your municipality.

Is a triplex really "free" to live in? Not automatically. "3 is free" is a goal: with three units, rent from two can cover much of the cost of the one you live in. Whether it does depends on your price, financing, rents and expenses.

Do I need a building permit to add units? Yes. Additional units must meet the Ontario Building Code and fire code, and a permit is required.

Do additional units pay development charges? Bill 23 exempts certain second and third units from development charges. Confirm how it applies to your property with your municipality.

Can a rural home on well and septic become a triplex? Sometimes, under local zoning, but septic capacity and local rules often decide it. Talk to the municipality and a septic professional first.

Photo credit: 321 Palmerston Boulevard, Toronto by Dillan Payne / PascalHD, CC BY-SA 4.0, via Wikimedia Commons.