Buy and Hold vs. BRRRR vs. Flip: One Canadian Property, Three Strategies

No strategy wins every deal: buy and hold suits investors who want long-term equity with the least work, BRRRR suits investors who want to reuse their cash, and flipping suits investors who want a one-time profit and accept higher risk and tax. The right answer comes from running the same property through all three and comparing the results with your goal, your cash and your time.

• Buy and hold: buy a property that already works, rent it out and keep it for years.
• BRRRR (buy, renovate, rent, refinance, repeat): buy below value, renovate, rent at the higher rent, then refinance to pull most of your cash back out. See BRRRR in Canada for the full process.
• Fix and flip: buy, renovate and sell within months. See how to calculate flip profit.

The rest of this guide runs one property through each plan with the same purchase price, rate and costs, so the differences come from the strategy alone.

The example is a dated side-by-side duplex listed at $560,000, with two vacant units that would rent for $1,850 each as they are or $2,350 each after an $80,000 renovation. Comparable renovated duplexes nearby sell for about $760,000, which is the after-repair value (ARV).

Every plan uses the same purchase financing: 20% down ($112,000) and a $448,000 mortgage at an illustrative 4.9% over 25 years, with Canadian semi-annual compounding. That is $2,580 a month, or $30,962 a year. Closing costs (land transfer tax, legal, inspection) are $11,500. Tenants pay their own hydro, so the owner’s operating expenses are $11,300 a year: property taxes $5,000, insurance $2,600, maintenance $2,200 and other costs $1,500.

Lenders generally need at least 20% down on a rental you won’t live in; see rental property down payments in Canada. Renovation is paid in cash. While the units are empty, the owner also pays utilities and vacant-home insurance.

As a buy and hold, the duplex needs $133,500 of cash and roughly breaks even: about $800 a year of cash flow plus $9,400 of mortgage paydown in year one. The owner spends $10,000 on paint and flooring and rents both units at $1,850.

Cash-on-cash return is only 0.6%, but cash flow plus principal paydown is 7.7% of the cash invested before any appreciation. That pattern is typical in Canada, where cap rates often sit below the mortgage constant; see cap rate vs. cash-on-cash return and rental property cash flow.

As a BRRRR, the duplex takes $221,500 up front, but a refinance at 80% of the $760,000 value returns about $155,900, leaving $65,500 in the deal and $152,000 of equity. The renovation takes four months and the refinance closes in month five.

With rents at $2,350, NOI rises to $43,408, but the bigger loan costs $42,020 a year, so cash flow is about $1,400 a year. Uninsured mortgages in Canada are capped at 80% of value, and breaking a fixed-rate mortgage early usually costs the higher of three months’ interest and the interest rate differential, so an open or portable first mortgage is worth arranging before you buy.

As a flip, the same duplex earns about $52,000 before tax on $225,100 of cash in six months, a 23% return, but the margin is thin enough that a 5% lower sale price cuts profit to about $15,700. The renovation matches the BRRRR plan, and the property sells at $760,000 in month six.

Flip profit = Sale price − selling costs − purchase − closing − renovation − holding costs

Selling costs (commission and legal) at 4.5% are $34,200, the mortgage penalty is $5,431, and six months of holding costs are $21,581, of which $4,662 is principal you get back at closing. After paying off the $443,338 balance, the sale returns $277,031 against $225,081 of cash put in.

At $560,000 the duplex fails the 70% rule (pay no more than 70% of ARV minus renovation, here $452,000), which is why its profit is so sensitive to the sale price. Many flippers also use private loans: our flip profit guide runs a similar $560,000 purchase at 9% interest with full Ontario selling costs, and profit falls to about $37,700.

Side by side, BRRRR builds the most equity per dollar left in the deal, the flip produces the most cash soonest, and buy and hold needs the least cash and carries the least execution risk.

BRRRR’s high return on cash comes from leaving little cash in, not from strong cash flow: NOI covers the new mortgage only 1.03 times. If the appraisal comes in low or the lender limits the refinance, more cash stays in and the return falls.

Rental profits are taxed each year as income, a long-term rental sale is usually a capital gain with half the gain taxable, and flip profits are generally fully taxable business income. This is general information, not tax advice; speak with an accountant before you act.

• Buy and hold and BRRRR: net rental income is added to your income each year, and mortgage interest is deductible when the money is used to buy or improve the rental. Any capital cost allowance claimed may be recaptured on sale. The capital gains inclusion rate remains one-half; the proposed increase was cancelled in March 2025.
• BRRRR refinance: cash-out proceeds are a loan, not income. Interest on them is deductible only if the money is used to earn income, such as buying the next rental.
• Flip: the CRA treats profit from buying to resell as business income, and since January 1, 2023, residential property held under 365 days is deemed a flip, with limited life-event exceptions. B.C. adds its own flipping tax; our flip profit guide has the details.

In our example, at a 43% marginal rate the $52,000 flip profit becomes about $29,600 after tax.

Choose the strategy that matches what you need from the deal: buy and hold for steady, low-effort equity, BRRRR for scaling with limited cash, and flipping for a near-term lump sum.

• You have cash, little time and a long horizon: buy and hold. Focus on a building that covers its costs with realistic vacancy and expense assumptions.
• You want to buy a property every year or two with the same pool of cash: BRRRR, if you can find properties below value and manage a renovation. Check your lender’s refinance rules before you buy.
• You want cash back within a year and can absorb a loss: a flip, but only at a price that leaves a margin for overruns. Plan for full business-income tax.

PropStack’s strategy view runs buy and hold, flip and buy-optimize-refinance on the same deal side by side and recommends a best path based on return and capital efficiency. You can change the renovation budget, after-repair value or refinance terms and watch all three update. Try it on a listing, no account needed.