Before investing, it’s crucial that you are clear about what your goals are and when a home won’t give the returns that are desired. House purchases in Montreal require careful thought and analysis. Prior to beginning your search for a property it’s also crucial that you know how much house can afford based on income, expenses and savings accounts.
Budget planning also means considering closing fees and other charges associated with buying property in Montreal, such as engaging with an experienced real estate agent and researching various neighborhoods to help find your ideal property. Also, with various incentives offered for first-time homebuyers making purchasing properties more cost effective if done with care and consideration you could become an owner in this vibrant city and enjoy all that it offers!
Values of properties have reached record-setting heights this month with double-digit increases in single-family condominiums, houses, and plexes all reaching record levels of growth. Median house prices on Montreal Island rose 12 percent year over year to reach $526,800 – an all-time high; condominium and plexe costs rose even further by 17-18 per cent and 17 per cent year on year; median condo costs have now hit $369,999 while median plex prices have now hit $647,000.
Incredible increases like these might convince you it’s time to take part in Montreal real estate investing. If this is your first experience purchasing non-living space property, keep in mind that investing is more complicated than meets the eye.
Here are some guidelines to assist in conducting proper due diligence prior to making an offer on an investment property:
Setting Your Investment Goals
Are You In Search Of Steady Revenue Do You Desire an Investment That Provides Steady Monthly Revenue for You
Or are You Open to having property that does not yield even returns and selling it five or 10 years down the line for more or less the same price? Perhaps You Require Mortgage Help Are You looking for an investment property which brings in consistent and recurring revenues each month, while providing mortgage helper payments through rent payments alone?
At any rate, it’s crucial that you clearly outline what your investment goals are in terms of both time and return – otherwise you risk finding yourself stuck with an asset which doesn’t yield what it promises.
Before looking at any numbers, first calculate them.
Many buyers can easily identify their ideal home, but if you’re investing, make sure the numbers work in your favor by creating a spreadsheet to calculate income and costs associated with properties you like; be wary of those that do not provide what you expect; add maintenance costs and protection in case there are delays finding tenants; when purchasing as an investment property it is wise to carefully examine its numbers to ensure its viability as an asset.
If you decide to make an offer, it is advisable to have your broker conduct an analysis of the market and revenue potential in order to arrive at an accurate price. Don’t assume that a seller will accept an offer which falls below what is necessary – they might just accept something cheaper when the property itself doesn’t break even at its present value!
Don’t skip the inspection
Even the least expensive building may not always be the cheapest; according to Broady, the more costly items should be kept an eye on – for instance windows, heating unit, roof condition.
Modern buildings may cost more, but their upkeep may be easier. Aside from an audit report, tenants should also be asked if any maintenance issues exist that need resolving immediately. Furthermore, it is vital that buildings comply with sanitation, safety maintenance and zoning rules to maintain optimal efficiency.
If there are tenant leases in place, it is advisable to obtain copies of lease agreements to confirm key conditions such as how long tenants have been living at your property, when their lease ends, the rent amounts they owe and who is accountable for electric/heating bills/snow removal etc. Additionally you could contact Quebec’s provincial Regie du Logement or Court of Quebec regarding nonpayment of rent claims made against tenants.
Gain knowledge on your rights as a renter
Quebec tenant protection laws are stringent; landlords cannot increase rent without justification, or expel an unsatisfactory tenant without exerting effort (often impossible). Therefore, it’s wise to spend some time familiarizing yourself with tenant rights so as to understand both your obligations as a landlord as well as those your tenants may possess that have yet to be acknowledged by you.
Make sure you consider investing in either a single-family house or condo as potential investments.
Broady noted that plexes aren’t the only type of property suitable for renting out. Condo rentals or single-family homes may be easier to manage with less tenants requiring maintenance calls, yet when living in a plex, you will still make money off other suites to cover building costs.