4-unit townhouse converted to 5-unit student rental — rents doubled, energy costs slashed, CMHC MLI Select Level 3 achieved. Closed June → 4 units renovated & fully rented by September 1.
| Property Detail | Information |
|---|---|
| Location | Near Western University, London, Ontario |
| Project Type | Multi-unit student rental renovation + energy upgrade |
| Original Configuration | 4-unit townhouse (3 bed / 1.5 bath per unit) |
| After Phase 1 | 4 units × 5 bed / 3 full bath — rent doubled on each |
| After Phase 2 | 5th unit added (1 bed/1 bath) — converted garage + rear space |
| Total Units | 5 self-contained units |
| Zoning | R5-4 (residential, near University of Western Ontario) |
| Closing Date | June 2023 |
| Phase 1 Completed | August 2023 — all 4 units renovated |
| Phase 1 Leased | September 1, 2023 — 100% occupancy |
| Phase 2 Completed | Within 1 month of building permit issuance |
| Energy Savings | 44.19% (CMHC MLI Select Level 3) |
| GHG Reduction | 79.04% |
| CMHC MLI Select Tier | Level 3 (Highest tier; requires 40%+ energy improvement) |
| Financing | CMHC MLI Select under National Housing Strategy |
| Permit Authority | City of London, Committee of Adjustment (Minor Variance OZ-9176) |
| Status | Complete · All 5 units leased |
This project began as a 4-unit townhouse near Western University in London, Ontario — each unit configured as 3 bedrooms and 1.5 bathrooms. Tang Construction saw an opportunity to dramatically increase both income and asset value through a two-phase renovation strategy backed by smart regulatory planning.
Phase 1 — Interior Transformation (Closed June → Rented September 1): Every unit was fully renovated with permits — kitchens, bathrooms, flooring, electrical, and plumbing all upgraded — expanding each from 3 bed / 1.5 bath to 5 bed / 3 full bath. The result: rents doubled on every unit. Critically, renovation of all four units was completed in August, just weeks after closing in June, and every unit was fully rented for September 1 move-in — the most valuable date in London's student rental calendar. Speed was the strategy.
Phase 2 — The Strategic 5th Unit: The garage and the space behind it were converted into a new self-contained 1-bedroom unit, completed within one month of building permit issuance. This wasn't just about adding a premium top-rent unit — it was a deliberate move to reach 5 units, the threshold required to qualify for CMHC MLI Select mortgage insurance. CMHC MLI requires a minimum of 5 units; without this 5th unit, the property would not have been eligible for preferred financing terms under the National Housing Strategy.
Phase 2 — Engineering Challenge: The garage conversion presented a significant structural challenge: insufficient headroom beneath an existing structural beam. Rather than compromise on ceiling height — a critical quality factor for a premium rental unit — Tang Construction excavated and removed the existing concrete slab, lowered the floor level, installed proper insulation below grade, and poured a new concrete floor to current building code standards. The result is a bright, high-ceiling suite that commands top-of-market rent, with construction fully inspected and code-compliant throughout.
Energy Efficiency — Dual Purpose: Comprehensive energy upgrades were implemented to serve two goals simultaneously: reducing ongoing operating costs for the property, and achieving the points required for CMHC MLI Select Level 3 certification. The EnerGuide audit by S2S Environmental Inc. confirmed 44.19% energy savings and 79.04% GHG reduction — exceeding the Level 3 threshold of 40% and unlocking the preferred mortgage insurance terms that make CMHC MLI financing advantageous.
The result is a fully stabilized, energy-efficient 5-unit student rental — acquired, renovated, certified, and fully leased in one seamless execution.
CMHC MLI Select (Mortgage Default Insurance) is a specialized mortgage insurance program designed to support the construction and acquisition of purpose-built rental properties in Canada. The program offers preferred mortgage insurance terms for rental properties that meet specific energy efficiency and affordability criteria. Level 3 (the highest tier) requires 40% or greater energy savings compared to a baseline equivalent home. By achieving CMHC MLI Select Level 3 certification, property owners access lower insurance premiums, more favorable lending terms, and alignment with federal National Housing Strategy objectives. This translates to better financing options and reduced borrowing costs—critical advantages for rental property investment profitability.
CMHC MLI Select Level 3 requires comprehensive energy improvements totaling 40% or greater energy consumption reduction. Common qualifying upgrades include:
This project combined multiple improvements to achieve 44.19% energy savings—exceeding the Level 3 threshold. An EnerGuide energy audit quantifies pre- and post-retrofit performance to certify qualification.
Adding a new residential unit to a property in London, Ontario requires a multi-step regulatory and construction process:
Tang Construction converted the garage and rear auxiliary space into a fully compliant 5th unit, navigating all regulatory approvals and achieving final occupancy within project timelines. A notable construction challenge arose: the existing concrete floor did not provide adequate headroom under a structural beam. The solution was to excavate and remove the slab, lower the floor level, install sub-slab insulation to current building code, and pour a new concrete floor — resulting in high ceilings and a premium feel that commands top-of-market rent.
A Minor Variance is a request to deviate from zoning bylaw requirements when a property's use or structure doesn't strictly conform to municipal regulations. In London, Ontario, Minor Variance applications are filed with the City of London, Committee of Adjustment.
When Minor Variance is needed for multi-unit rentals:
The Minor Variance Test (four tests must be satisfied):
The Minor Variance (OZ-9176) was approved by the Committee of Adjustment to authorize the 5-unit conversion on an R5-4 property.
The 5th unit was not just about rental income — it was the key to unlocking CMHC MLI Select mortgage insurance. CMHC MLI Select requires a minimum of 5 residential units to qualify. With only 4 units, this property would not have been eligible for the program, regardless of energy performance.
By converting the garage and rear space into a legal 1-bedroom unit, the property crossed the 5-unit threshold. This opened access to preferred mortgage insurance terms under Canada's National Housing Strategy — better rates, improved loan-to-value coverage, and long-term financing advantages that significantly improve investment returns.
The 5th unit also commands top rent as a self-contained 1-bed suite — contributing meaningfully to the rent roll while simultaneously being the key to CMHC qualification.
Speed is everything in student housing — in London, Ontario, September 1 is the single most important rental date of the year. Missing it means waiting a full year for the next tenant cycle. Tang Construction plans and executes renovations with that deadline as the primary constraint.
This project's timeline:
From closing to fully rented: under 3 months. This kind of execution requires pre-arranged permits, coordinated trades, and a team that treats every week of vacancy as real money lost.
Tang Construction specializes in multi-unit rental renovations, regulatory approval navigation, and CMHC MLI Select certification. Let's discuss how to unlock the full potential of your property investment.