Rouge Hill 5-level backsplit with in-law suite potential on a quiet Scarborough street
A 4-bed detached backsplit in Rouge Hill listed at $979,900 with finished lower levels suited to a secondary suite conversion. The income-conversion path is the thesis; current single-family rent does not carry the mortgage at standard leverage.
Anatoli Chtcherbatov
Analyst · Sutton Group Admiral Realty
List price
$979,900
Cap rate
+2.07%
Est. monthly rent
$3,350
Source: comparables_widened
Est. net spread
+$221K
6mo hold
Annualized ROI
+45%
preliminary
Section · Why this passed our floor
What lifts the math here
Current cap
2.07% on the existing single-unit rent. The thesis is the income uplift after the conversion is complete, not today's number.
Projected post-conversion spread
$220,877 estimated over a 6-month hold using default market reno costs and the underwritten rent source.
Recommended leverage
75% down to reach neutral or positive carry during the conversion window.
Rent backed by
Estimate sourced from city-wide comparables, not a CMHC fallback.
Every property published on 6Yield clears a multi-stage screen — universal financial floor, per-tier quality gate, and an editorial review on listing evidence. These bullets summarize the specific facts that cleared this property’s tier. Estimates only; not financial advice.
Fix-and-flip projection
The spread, before the buy-and-hold math.
Preliminary · adjust scope & uplift
Renovation scope
Projection
Preliminary estimate. Renovation costs use 6Yield default per-sqft figures. Post-renovation value is modeled as a multiple of list price — replace with comparable post-renovation sales for higher precision. Carrying costs include property tax, condo fees if any, and insurance; financing costs not yet modeled.
Section · Buy-and-hold backup
If you held instead. The carrying math, side by side.
Each column shows the actual monthly cash flow and cash-on-cash return at that leverage. Click a column for the full breakdown.
Acquisition
| Down payment | $342,965 |
| Mortgage principal | $636,935 |
| Land transfer tax | $14,699 |
| Closing costs | $14,699 |
| Total acquisition | $372,362 |
Monthly cash flow
| Estimated rent | +$3,350 |
| Operating expenses | -$1,660 |
| Mortgage payment | -$3,720 |
| Net cash flow | -$2,030/mo |
Expense breakdown
| Property tax | $0/mo |
| Vacancy allowance | $168/mo |
| Maintenance reserve | $817/mo |
| Insurance | $408/mo |
| Property management | $268/mo |
Calculated at 4.99% mortgage over 25 years. Rent estimated from comparable rentals (n=24).
Breakeven
This property turns cash-flow positive at 70.5% down.
Run your own scenario
Move the assumptions. See the math live.
Live result
All figures are estimates only and do not constitute financial advice. The sliders use the same math as the locked five-scenario calculator; only assumptions change. Total acquisition includes the down payment, land transfer tax ($14,699), and closing costs ($14,699).
Section · Investment Thesis
Why this property.
This listing fits a value-add investor willing to legalize the lower levels as a secondary or in-law suite to lift NOI. At the $979,900 list price the estimated cap rate is 2.07% on a single-tenant basis, which does not support standard leverage. The mechanic here is the 5-level backsplit layout with finished lower levels that the listing flags for "multi-generational living or in-law suite potential", converting a single rent stream into two and repricing the asset on stabilized income.
Rouge Hill sits in east Scarborough near the Rouge National Urban Park and the Rouge Hill GO station on the Lakeshore East line, with Highway 401 access north of the property. The submarket is dominated by mid-century detached stock on deep lots, which supports basement-suite conversions where lot grading and separate-entrance feasibility permit. The City of Toronto's as-of-right permissions for secondary suites and garden suites under the multiplex framework apply across Scarborough, which is the regulatory backdrop that makes the income-conversion thesis executable rather than speculative. Nearby schools, parks, and the Lawrence Avenue East corridor anchor end-user demand for the eventual exit or refinance.
Execution requires 75% down or more to reach positive carry: at 75% down the estimated monthly cash flow is $258.95, and an all-cash position generates an estimated $1,689.62 per month. Plan a 24 to 36 month hold to permit, build, and stabilize a second unit, then refinance against the higher appraised value. Buyers leveraging at 20% or 35% should underwrite negative carry through the conversion period.
Key features
- 5-level detached backsplit layout
- 4 bedrooms, 3 bathrooms
- Finished lower levels flagged for in-law suite potential
- Private fenced backyard with deck
- Quiet family street in Rouge Hill
- Proximity to schools, parks, and transit
Original MLS description
Welcome to this bright and spacious 5-level detached backsplit located on a quiet, family-friendly street in desirable Rouge Hill, Scarborough. Offering a versatile and functional layout, this well-maintained home features generous principal rooms, an inviting living/dining area filled with natural light. The lower levels provide excellent flexibility with finished living space, making it perfect for multi-generational living or in-law suite potential. Enjoy a private, fenced backyard with deck, along with close proximity to schools, parks, transit, and amenities. A rare opportunity to own a classic backsplit with outstanding space and versatility in a sought-after neighbourhood. * Photos Have Been Virtually Staged* (42773955)
All photos
26 additional · click any to expand
Section · Neighborhood
Where it sits.
Rouge
Rouge Hill is an established east Scarborough pocket bordering the Rouge National Urban Park, served by the Rouge Hill GO station on the Lakeshore East line and connected to downtown via Highway 401. Housing stock is predominantly mid-century detached on deep lots, the format that supports basement and garden suite conversions under Toronto's multiplex permissions.
End-user demand is anchored by family buyers drawn to park frontage, lakefront access, and the Lawrence Avenue East amenity corridor. The submarket trades at a discount to central Scarborough nodes, which widens the spread between acquisition cost and stabilized value after a suite conversion.
Section · Risk
What could go wrong.
Honest framing of unknowns, assumptions, and downside scenarios.
High leverage sensitivity: cash flow is negative at 20%, 35%, and 50% down. Positive carry begins at 75% down.
Estimated cap rate 2.07% on a single-tenant basis is below GTA cash-flow thresholds; thesis depends on executing a second-unit conversion.
Secondary suite legalization requires permits, separate egress, fire separation, and parking compliance; budget and timeline risk applies.
Rent estimate sourced from widened comparables rather than direct neighborhood comps; underwrite conservatively.
Photos are virtually staged; verify actual interior condition on site before committing capital.