The recent fatal fire in Brampton—where an unregistered sub-unit and unsafe alterations were discovered—has once again highlighted the hidden risks behind converting single-family homes into multi-tenant rooming arrangements. While the idea often appears profitable on the surface, the realities tell a very different story. Below is a clearer look at why this strategy carries far greater risks than many investors realize.

1. Cash Flow Looks Attractive, but the Hidden Costs Are Much Higher

Many investors are drawn to the concept because dividing a home into multiple rooms seems to dramatically increase monthly rental income.
But “more rooms” does not automatically equal “more profit.”

• Higher wear and tear
  Multiple unrelated tenants typically use the property more intensively. Floors, walls, fixtures, and appliances deteriorate much faster, resulting in ongoing repair expenses that accumulate over time.

• More frequent repairs
  With more people living in the home, issues arise more often—plumbing, electrical problems, noise complaints, and minor damages become routine. These repairs directly reduce net income.

• Higher turnover and vacancy risk
  Rooming tenants often stay shorter periods compared to families. Frequent move-outs mean more cleaning, advertising, showings, and vacancy gaps, which disrupt cash flow.

• Severe long-term consequences when accidents occur
  A fire, flood, or major structural issue can instantly wipe out years of rental income. Beyond repair costs, future rental potential may be damaged if the property becomes associated with unsafe use.

On paper, rooming rentals seem profitable; in reality, the extra costs and risks often erode much of the expected return.

2. Safety Risks Are Significantly Higher in Illegal or Poorly Planned Rooming Houses

The Brampton fire revealed what many cities already know:
unlicensed sub-units and makeshift conversions are extremely dangerous.

Common issues include:

• Improvised walls and altered layouts
  Tenants or unlicensed contractors may add partitions to create “extra rooms,” which often block ventilation or escape routes.

• Overloaded electrical systems
  Single-family homes are not designed for multiple fridges, space heaters, hot plates, or several high-power devices running simultaneously. Overheating and electrical fires become much more likely.

• Insufficient or non-functional smoke alarms
  Many illegal units lack interconnected alarms or have devices that are outdated, removed, or improperly installed.

• Blocked or inadequate exits
  Basement rooms without proper egress windows, doors leading into locked spaces, or hallways obstructed by belongings all create deadly evacuation challenges.

These hazards may go unnoticed for a long time—but when something goes wrong, the consequences are immediate and irreversible. The Brampton tragedy illustrates how unsafe rooming conversions put both lives and property at risk.

3. Insurance May Not Cover You—Even If You Think You Are Protected

One of the most misunderstood risks is insurance.
Most landlords assume that having insurance means they’re fully covered.

In reality:

• Insurance policies are strict about declared use
  If the home is insured as a “single-family residence,” but is being used as a rooming house, the insurer can legally deny the claim because the actual use was misrepresented.

• Premiums increase for high-risk arrangements
  Even if you disclose rooming use, insurers may charge significantly higher premiums due to the elevated fire and liability risks.

• Rejected claims can be financially devastating
  If a fire occurs and the insurer refuses to pay, the landlord may be responsible for:

  • Rebuilding the home

  • Tenant property losses

  • Potential lawsuits

  • Legal liabilities for injury or death

The financial damage from a single uninsured incident can far exceed any rental gains collected over the years.

4. Rooming Rentals Are Extremely Difficult to Manage

Many new investors believe that “more tenants means more income.”
But in day-to-day operations, it usually means:

• Higher conflict levels
  Unrelated adults sharing kitchen, laundry, parking, and bathrooms often experience disputes about cleanliness, noise, and boundaries.

• More complaints from neighbours
  Parking congestion, noise, and garbage issues attract attention quickly, and repeated complaints may trigger bylaw inspections or fines.

• Constant communication and coordination
  With several tenants, the landlord must respond to more questions, requests, disagreements, and maintenance needs.

• Greater administrative load
  More leases, more renewals, more move-ins and move-outs, more screening, and more enforcement. For a single landlord without professional management, the workload can easily become overwhelming.

The practical reality is clear:
Multi-tenant rooming arrangements demand far more time, oversight, and emotional energy than a standard rental.

5. So What Makes a Good Investment Property?

A strong, sustainable rental property does not rely on squeezing as many rooms as possible into a home.
It depends on:

• Safety and building-code compliance
  Legal secondary suites, proper fire separation, compliant electrical systems, and approved layouts ensure the home is safe and insurable.

• Steady tenant demand
  Properties located near strong schools, transit, employment centres, or family-oriented communities attract stable, long-term tenants.

• Long-term neighbourhood growth
  Areas with strong infrastructure, economic development, or community amenities generally offer better appreciation and predictable rental demand.

• Full transparency with insurers and municipalities
  Ensuring that your rental is properly licensed (where required) and accurately insured protects both your investment and your tenants.

Good real estate investing is not about maximizing room count—it is about operating safely, legally, and sustainably.

Final Thoughts: High Rent Is Not the Same as High Return

The Brampton fire is tragic, but it serves as a much-needed wake-up call for both landlords and renters.
Rooming rentals inside single-family homes may look profitable at first glance, but the risks—financial, legal, operational, and personal—are far greater than most new investors expect.

Responsible investment means prioritizing:

• safety

• compliance

• proper maintenance

• and sustainable rental strategies

Short-term cash flow should never come at the expense of tenant safety or long-term financial security.

Contact The Fisher Group – Your Real Estate Experts in Oakville and the GTA

Fisher Yu
📱 647.598.8488
📧 [email protected]
🌐 thefishergroup.ca