It’s best to clearly define what you’re looking to get out of your investment and when so you don’t end up saddled with a property that isn’t giving you the payoff you want.
Property values reached record-setting heights again last month, with double-digit increases in the price of single-family homes, condos and plexes.
The median price of single-family homes on the island of Montreal increased 12 per cent over the previous January to $526,800 — a record. The price of condos and plexes increased even more spectacularly, climbing 18 and 17 per cent, respectively. The median price of a condo on the island is now $369,000, while the median two- to five-unit plex has now reached $647,000.
Impressive increases like these may have you thinking it’s time to get in on the action and start investing in Montreal real estate. If it’s your first time buying a property you won’t live in, you should know that buying profitable investment property isn’t as easy as it looks.
Here are six tips to help you do your due diligence before putting an offer on an investment property:
1. Determine your investment objectives
Are you looking for an investment that will generate regular income for you on a monthly basis? Or are you OK with a property breaking even if you believe you can sell it at a profit five or 10 years from now? Or maybe you’re just looking for a mortgage helper and you don’t need the rental income to fully cover all the property’s expenses?
Whatever your objective, it’s best to clearly define what you’re looking to get out of your investment and when so you don’t end up saddled with a property that isn’t giving you the payoff you want.
2. Do the math before you look
Most buyers know their dream home when they see it. If you’re mainly buying for investment, however, the most important thing to see is that the numbers are in your favour.
Create a spreadsheet to calculate income vs. expenses for the properties that interest you, and don’t see anything that doesn’t deliver the return you’re looking for. Remember to factor in maintenance costs as well as a cushion in case of late payment or a delay in finding a new tenant.
If you do put in an offer, have your broker do a market analysis and factor in the revenue potential to come up with a fair price. Don’t assume the seller will take a lowball offer even if the property doesn’t break even at the current price. The seller’s willingness to negotiate will vary depending on local market dynamics and their personal situation.
According to Royal LePage realtor Sean Broady, Montreal is a seller’s market right now, but savvy buyers may have more luck finding profitable buildings — and better luck negotiating — in outlying areas.
“In N.D.G., if you’re trying to buy a plex, they’re selling for very good prices for sellers. Most are cash-flow negative, but it’s a hot market and they’re selling quickly, whereas a Valleyfield triplex may have more room to negotiate,” Broady said.
3. Don’t skip the inspection!
The lowest-priced building isn’t always the best deal. According to Broady, the big-ticket items are the most important to pay attention to, including the age of the heating system, windows and roof.
While newer buildings may cost more, they may have fewer maintenance headaches. In addition to your inspection report, you may also want to ask any current tenants if there are outstanding maintenance issues they are aware of. You will also need to ensure the building complies with all safety, sanitation, maintenance and zoning requirements.
If you have made an offer subject to inspection and you discover major defects or maintenance issues, the ball’s in your court: Depending on what you discover, you can try to negotiate an adjustment to the price, ask the seller to make necessary repairs or walk away from the deal.
4. Vet the tenants
If there are existing tenants, request copies of the lease agreements to verify key terms of the lease, including how long they have been there, when the lease is up, how much they pay in rent, and determine who is responsible for heating and electricity costs and things like snow removal. You can also check with the provincial Régie du Logement and the Court of Quebec to check if there are any complaints on file against the tenants for nonpayment of rent.
While a tenanted building is easier to secure financing for and offers some peace of mind for the buyer, the downside is that longtime tenants may be paying below-market rent. Conversely, a vacant or owner-occupied building can be more easily upgraded and re-listed at a higher monthly rate.
5. Read up on renters’ rights
Tenant protection laws are strict in Quebec. You can’t jack up the rent for no reason or evict a tenant — even a bad tenant — without effort (and sometimes, not at all). It’s a good idea to spend a bit of time familiarizing yourself with the law so you know your responsibilities as a landlord as well as what your tenants are and are not entitled to. A good place to start is Éducaloi’s plain-language legal resources for landlord and tenants, as well as the Régie du Logement’s guide for new landlords.
The Régie recommends new landlords should check if the former owners sent out notices of rent increase, or received a notice of non-renewal of lease, or any other recent notices, for example to sublet a unit or assign a lease.
6. Don’t overlook investing in a single-family home or condo
Plexes are far from the only type of property you can rent out, Broady noted. Single-family home or condo rentals mean you have fewer tenants to deal with, so you are more likely to have fewer maintenance calls. On the other hand, in a plex, if one unit is vacant you’ll still have income from the other suites to offset the building’s expenses.
“The single-family home rental market is very active,” Broady said. “There are shortages of these rentals not only on the Island but also Off-Island.”
Local builders still busy as real estate market takes a break – Times Colonist
The real estate market may be taking a breather, but there has been no such break for homebuilders in the region judging by new housing start figures from the Canada Mortgage and Housing Corporation.
The numbers, released Tuesday, show 2,681 new homes were started through the first seven months of this year in Greater Victoria, ahead of last year’s pace when 2,500 new units were started.
It’s a tale of multi-family projects in two parts of the region, said Casey Edge, executive director of the Victoria Residential Builders Association.
Edge said Victoria and Langford are once again doing all of the heavy lifting.
“There are a bunch of municipalities that just fly under the radar every year, like Oak Bay that still doesn’t have zoning for duplex housing,” he said noting Oak Bay has built just 19 new homes this year, while North Saanich has started 16.
“And people question why do we have a housing affordability problem,” he said.
“Well, you have just a handful of municipalities that are really carrying the weight for 13 municipalities.”
The lion’s share has been done by Victoria so far this year.
With a focus on condo and rental apartments, the city has seen 1,219 homes started, well ahead of last year’s 696. Langford has started 663 so far this year, off last year’s pace of 862 through the end of July.
Edge said what’s missing is the missing middle housing — townhomes and houseplexes, rather than the usual condos and single-family homes — that can suit small families and provide more housing options in all parts of the region.
The fact builders in at least two of the region’s centres are busy may help the market catch up a bit, as the number of property sales has slowed considerably. The B.C. Real Estate Association released numbers on Tuesday showing Victoria’s sales dropped 37.5 per cent in July compared with the same time last year, while the Island saw a 40 per cent drop and the province fell 42 per cent.
“High mortgage rates continued to lower sales activity in July,” said BCREA chief economist Brendon Ogmundson.
“Many regions around the province have seen sales slip to levels well below normal for this time of year.”
At the same time, provincial active listings rose 28 per cent year-over-year.
Inventories remain quite low, but the slow pace of sales has tipped some markets into balanced or even buyers’ market territory, the association noted.
Year-to-date, residential unit sales were down 29.3 per cent to 56,801 units, while the average residential price was up 13.2 per cent to $1.03 million.
>>> To comment on this article, write a letter to the editor: email@example.com
Podcast: Real estate marketing strategy with Publish Partners | RENX – Real Estate News EXchange
Podcast: Real World of Real Estate with Gerald Tostowaryk
Max Jakubke, principal and founder of Publish Partners, and the firm’s digital marketing director Bianca Elliot discuss numerous strategies for effective online real estate marketing with host Gerald Tostowaryk.
One of the focuses for the episode, the second in a series on real estate marketing, is using data effectively to improve your storytelling ability about a project or development.
As part of the discussion, Jakubke and Elliot share some examples of successful campaigns.
Publish Partners is an international firm based in Vancouver.
Perfect time for sellers in Saskatchewan real estate market – Global News
For people who analyze statistics for a living, interpreting numbers is often about perspective.
For example, take home sales in Saskatchewan last month.
The province saw a 10-per cent reduction in home sales from 2021. However, last year was a record year for home sales in Saskatchewan.
“Overall, most regional markets are starting to shift away from the exceptionally tight market conditions seen earlier in the year,” the Saskatchewan Realtors Association said in a press release.
“However, most regional markets still face conditions that are tighter this July then they were last year.”
One of the reasons for the reduction is the spending issues many people are facing as inflation has drove prices of everyday items up. Another reason the market has slowed is the simple fact it’s summer and people aren’t home.
“People are on holidays, they’re out farming and so typically we see a slower market and people are maybe not used to that because during the pandemic we had a market that was very busy throughout the year,” said Chris Guérette, the CEO of Saskatchewan Realtors Association.
“So we are returning to sort of pre-pandemic activity during this time of the year.”
Buyers are more leaning towards more homes priced under $400,000, which as a result means less are available and slowing down sales.
“Inventory levels trended up in July over previous months, but every region still faced inventory levels that were lower than the previous year and long-term averages,” the press release read.
“Overall, most regional markets are starting to shift away from the exceptionally tight market conditions seen earlier in the year. However, most regional markets still face conditions that are tighter this July then they were last year.
Guérette said overall, the provinces market it a lot more stable than other places.
“We know that we won’t have the drastic ups & downs that other large municipalities are facing & other provinces are facing at the time right now. So that means places like Ontario and B.C are seeing some really large dips and some swings.”
Guérette said it is a sellers’ market right now, with the average price of a home in Saskatchewan going up to $335,000.
How to send your kids off and prepare for university housing.
© 2022 Global News, a division of Corus Entertainment Inc.
Between court ruling and new world rankings, LIV golfers facing long road back to PGA Tour – Sportsnet.ca
In an ‘urgent’ situation, Blue Jays come up short yet again – Sportsnet.ca
Samsung's Galaxy Z Fold 4 and Flip 4 feature new 'Light' battery-saving mode – MobileSyrup
Silver investment demand jumped 12% in 2019
Europe kicks off vaccination programs | All media content | DW | 27.12.2020 – Deutsche Welle
Global Media Markets, 2015-2020, 2020-2025F, 2030F – TV and Radio Broadcasting, Film and Music, Information Services, Web Content, Search Portals And Social Media, Print Media, & Cable – GlobeNewswire
News22 hours ago
Baskin-Robbins signs its largest franchise development agreement in 51 years in Canada
Health23 hours ago
Why it’s crucial to say that monkeypox is predominately affecting gay and bisexual men – Broadview Magazine
Health22 hours ago
Rapid Polio Spread In New York: All You Need To Know – TheHealthSite
News21 hours ago
Hip Hop Icon Maestro Fresh Wes Takes Scarborough Back To School!
News16 hours ago
Canadian parliamentarians 'hoping' to make October visit to Taiwan – CBC News
News14 hours ago
Canada eyes cash for critical minerals in Biden's big new climate bill – CBC News
Sports13 hours ago
Schneider: 'Everything is on the table' for struggling Kikuchi – TSN
News12 hours ago
Ageism: Does it Exist or Is It a Form of ‘I’m a Victim!’ Mentality? [ Part 3 ]