Fall, a strategic time for real estate investors
Frédéric Vinet, real estate broker
Fall is a strategic time for real estate investors in Montréal: the market picks up again and new income properties come up for sale. It's the moment to revisit your strategy and know how much financing you can get. From a duplex to a 6-plex, you analyze the income, the expenses, the condition of the building and the area, so you're ready when a good opportunity comes along.
Fall is often an interesting time for real estate investors in Montréal. After the summer months, the market gradually picks up and new properties can appear, income properties among them.
For investors looking to buy or grow their portfolio, it can be a chance to revisit their strategy, look at what's available and get ready for the opportunities that may come up before the end of the year.
Income properties to watch
The Montréal market offers a wide variety of income properties, from duplexes to larger buildings.
Duplexes, triplexes and quadruplexes can suit investors taking their first steps into rental property or steadily growing their portfolio. 5-plexes and 6-plexes are generally bigger purchases, with several rental units and a financial structure that deserves a thorough analysis.
These kinds of buildings are especially common in several central Montréal areas, including the Plateau-Mont-Royal, Rosemont–La Petite-Patrie, Outremont and Villeray–Saint-Michel–Parc-Extension.
For an investor, though, the number of units is only one thing to consider. The building's income, its expenses, its condition and the area's potential also have to go into the equation.
A time to revisit your investment strategy
The start of fall is a good moment to take stock of your real estate goals.
An owner who already holds one or more buildings can look at how the portfolio is performing, review income and expenses, plan some work and decide whether to keep buying.
For a new investor, this is a time to sharpen your plans instead: what type of building should you look for? In which area? With what budget? What level of rental income are you aiming for?
A clear strategy helps you assess the properties that come on the market, and keeps you from deciding on the asking price or the look of the building alone.
The purchase price doesn't tell the whole story
When you analyze an income property, the listed price is only a starting point.
Current rental income, operating expenses, municipal and school taxes, insurance, maintenance and upcoming work give you a much fuller picture of the property.
You also need to look at the rents in place and comparable rents in the area to understand the building's income potential.
For a 5-plex or 6-plex, this analysis matters even more. With several units, a fairly small difference in income or expenses can have a big impact on the overall performance of the investment.
So the goal is to understand what the building brings in today, and also what it could offer over the medium and long term.
The area: a central part of the investment
Beyond the building itself, location remains an important factor in any investment decision.
In Montréal, areas like the Plateau-Mont-Royal, Rosemont–La Petite-Patrie, Outremont and Villeray–Saint-Michel–Parc-Extension have many income properties, and each has its own particularities.
Being close to shops, services, public transit, schools and major roads can affect how appealing a building is to tenants.
For an investor, it pays to study the area as much as the property: how the neighbourhood is changing, rental demand, the types of units people want, and comparable properties that sold recently.
Be ready when an opportunity comes up
A good investment opportunity doesn't always leave you much time to think.
That's why preparation matters so much. A clear idea of your budget, knowing how much financing you can get and knowing what type of property fits your strategy let you move faster when an interesting building comes on the market.
That goes for a first duplex as much as for buying a triplex, quadruplex, 5-plex or 6-plex.
The goal isn't necessarily to find the biggest building possible, but a property that fits the investor's goals, resources and strategy.
Fall, the time to plan what comes next
Fall can be an ideal time to step back, look at the market and prepare your next real estate decisions.
Whether you already own an income property or are considering a first purchase, a good grasp of the income, expenses, financing and area helps you make decisions better suited to your plans.
In Montréal, investment opportunities come in many forms. From a duplex to a 6-plex, every property deserves to be analyzed on its own characteristics and the investor's goals.
Thinking of buying an income property in Montréal? A close look at your plans and the properties available can help you zero in on the opportunities that fit your strategy!
