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.
Real eState
Investing in Montreal real estate: 6 tips for first-timers – Montreal Gazette
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.”
Related
Real eState
Here are some facts about British Columbia’s housing market
Housing affordability is a key issue in the provincial election campaign in British Columbia, particularly in major centres.
Here are some statistics about housing in B.C. from the Canada Mortgage and Housing Corporation’s 2024 Rental Market Report, issued in January, and the B.C. Real Estate Association’s August 2024 report.
Average residential home price in B.C.: $938,500
Average price in greater Vancouver (2024 year to date): $1,304,438
Average price in greater Victoria (2024 year to date): $979,103
Average price in the Okanagan (2024 year to date): $748,015
Average two-bedroom purpose-built rental in Vancouver: $2,181
Average two-bedroom purpose-built rental in Victoria: $1,839
Average two-bedroom purpose-built rental in Canada: $1,359
Rental vacancy rate in Vancouver: 0.9 per cent
How much more do new renters in Vancouver pay compared with renters who have occupied their home for at least a year: 27 per cent
This report by The Canadian Press was first published Oct. 17, 2024.
The Canadian Press. All rights reserved.
Real eState
B.C. voters face atmospheric river with heavy rain, high winds on election day
VANCOUVER – Voters along the south coast of British Columbia who have not cast their ballots yet will have to contend with heavy rain and high winds from an incoming atmospheric river weather system on election day.
Environment Canada says the weather system will bring prolonged heavy rain to Metro Vancouver, the Sunshine Coast, Fraser Valley, Howe Sound, Whistler and Vancouver Island starting Friday.
The agency says strong winds with gusts up to 80 kilometres an hour will also develop on Saturday — the day thousands are expected to go to the polls across B.C. — in parts of Vancouver Island and Metro Vancouver.
Wednesday was the last day for advance voting, which started on Oct. 10.
More than 180,000 voters cast their votes Wednesday — the most ever on an advance voting day in B.C., beating the record set just days earlier on Oct. 10 of more than 170,000 votes.
Environment Canada says voters in the area of the atmospheric river can expect around 70 millimetres of precipitation generally and up to 100 millimetres along the coastal mountains, while parts of Vancouver Island could see as much as 200 millimetres of rainfall for the weekend.
An atmospheric river system in November 2021 created severe flooding and landslides that at one point severed most rail links between Vancouver’s port and the rest of Canada while inundating communities in the Fraser Valley and B.C. Interior.
This report by The Canadian Press was first published Oct. 17, 2024.
The Canadian Press. All rights reserved.
News
No shortage when it comes to B.C. housing policies, as Eby, Rustad offer clear choice
British Columbia voters face no shortage of policies when it comes to tackling the province’s housing woes in the run-up to Saturday’s election, with a clear choice for the next government’s approach.
David Eby’s New Democrats say the housing market on its own will not deliver the homes people need, while B.C. Conservative Leader John Rustad saysgovernment is part of the problem and B.C. needs to “unleash” the potential of the private sector.
But Andy Yan, director of the City Program at Simon Fraser University, said the “punchline” was that neither would have a hand in regulating interest rates, the “giant X-factor” in housing affordability.
“The one policy that controls it all just happens to be a policy that the province, whoever wins, has absolutely no control over,” said Yan, who made a name for himself scrutinizing B.C.’s chronic affordability problems.
Some metrics have shown those problems easing, with Eby pointing to what he said was a seven per cent drop in rent prices in Vancouver.
But Statistics Canada says 2021 census data shows that 25.5 per cent of B.C. households were paying at least 30 per cent of their income on shelter costs, the worst for any province or territory.
Yan said government had “access to a few levers” aimed at boosting housing affordability, and Eby has been pulling several.
Yet a host of other factors are at play, rates in particular, Yan said.
“This is what makes housing so frustrating, right? It takes time. It takes decades through which solutions and policies play out,” Yan said.
Rustad, meanwhile, is running on a “deregulation” platform.
He has pledged to scrap key NDP housing initiatives, including the speculation and vacancy tax, restrictions on short-term rentals,and legislation aimed at boosting small-scale density in single-family neighbourhoods.
Green Leader Sonia Furstenau, meanwhile, says “commodification” of housing by large investors is a major factor driving up costs, and her party would prioritize people most vulnerable in the housing market.
Yan said it was too soon to fully assess the impact of the NDP government’s housing measures, but there was a risk housing challenges could get worse if certain safeguards were removed, such as policies that preserve existing rental homes.
If interest rates were to drop, spurring a surge of redevelopment, Yan said the new homes with higher rents could wipe the older, cheaper units off the map.
“There is this element of change and redevelopment that needs to occur as a city grows, yet the loss of that stock is part of really, the ongoing challenges,” Yan said.
Given the external forces buffeting the housing market, Yan said the question before voters this month was more about “narrative” than numbers.
“Who do you believe will deliver a better tomorrow?”
Yan said the market has limits, and governments play an important role in providing safeguards for those most vulnerable.
The market “won’t by itself deal with their housing needs,” Yan said, especially given what he described as B.C.’s “30-year deficit of non-market housing.”
IS HOUSING THE ‘GOVERNMENT’S JOB’?
Craig Jones, associate director of the Housing Research Collaborative at the University of British Columbia, echoed Yan, saying people are in “housing distress” and in urgent need of help in the form of social or non-market housing.
“The amount of housing that it’s going to take through straight-up supply to arrive at affordability, it’s more than the system can actually produce,” he said.
Among the three leaders, Yan said it was Furstenau who had focused on the role of the “financialization” of housing, or large investors using housing for profit.
“It really squeezes renters,” he said of the trend. “It captures those units that would ordinarily become affordable and moves (them) into an investment product.”
The Greens’ platform includes a pledge to advocate for federal legislation banning the sale of residential units toreal estate investment trusts, known as REITs.
The party has also proposed a two per cent tax on homes valued at $3 million or higher, while committing $1.5 billion to build 26,000 non-market units each year.
Eby’s NDP government has enacted a suite of policies aimed at speeding up the development and availability of middle-income housing and affordable rentals.
They include the Rental Protection Fund, which Jones described as a “cutting-edge” policy. The $500-million fund enables non-profit organizations to purchase and manage existing rental buildings with the goal of preserving their affordability.
Another flagship NDP housing initiative, dubbed BC Builds, uses $2 billion in government financingto offer low-interest loans for the development of rental buildings on low-cost, underutilized land. Under the program, operators must offer at least 20 per cent of their units at 20 per cent below the market value.
Ravi Kahlon, the NDP candidate for Delta North who serves as Eby’s housing minister,said BC Builds was designed to navigate “huge headwinds” in housing development, including high interest rates, global inflation and the cost of land.
Boosting supply is one piece of the larger housing puzzle, Kahlon said in an interview before the start of the election campaign.
“We also need governments to invest and … come up with innovative programs to be able to get more affordability than the market can deliver,” he said.
The NDP is also pledging to help more middle-class, first-time buyers into the housing market with a plan to finance 40 per cent of the price on certain projects, with the money repayable as a loan and carrying an interest rate of 1.5 per cent. The government’s contribution would have to be repaid upon resale, plus 40 per cent of any increase in value.
The Canadian Press reached out several times requesting a housing-focused interview with Rustad or another Conservative representative, but received no followup.
At a press conference officially launching the Conservatives’ campaign, Rustad said Eby “seems to think that (housing) is government’s job.”
A key element of the Conservatives’ housing plans is a provincial tax exemption dubbed the “Rustad Rebate.” It would start in 2026 with residents able to deduct up to $1,500 per month for rent and mortgage costs, increasing to $3,000 in 2029.
Rustad also wants Ottawa to reintroduce a 1970s federal program that offered tax incentives to spur multi-unit residential building construction.
“It’s critical to bring that back and get the rental stock that we need built,” Rustad said of the so-called MURB program during the recent televised leaders’ debate.
Rustad also wants to axe B.C.’s speculation and vacancy tax, which Eby says has added 20,000 units to the long-term rental market, and repeal rules restricting short-term rentals on platforms such as Airbnb and Vrbo to an operator’s principal residence or one secondary suite.
“(First) of all it was foreigners, and then it was speculators, and then it was vacant properties, and then it was Airbnbs, instead of pointing at the real problem, which is government, and government is getting in the way,” Rustad said during the televised leaders’ debate.
Rustad has also promised to speed up approvals for rezoning and development applications, and to step in if a city fails to meet the six-month target.
Eby’s approach to clearing zoning and regulatory hurdles includes legislation passed last fall that requires municipalities with more than 5,000 residents to allow small-scale, multi-unit housing on lots previously zoned for single family homes.
The New Democrats have also recently announced a series of free, standardized building designs and a plan to fast-track prefabricated homes in the province.
A statement from B.C.’s Housing Ministry said more than 90 per cent of 188 local governments had adopted the New Democrats’ small-scale, multi-unit housing legislation as of last month, while 21 had received extensions allowing more time.
Rustad has pledged to repeal that law too, describing Eby’s approach as “authoritarian.”
The Greens are meanwhile pledging to spend $650 million in annual infrastructure funding for communities, increase subsidies for elderly renters, and bring in vacancy control measures to prevent landlords from drastically raising rents for new tenants.
Yan likened the Oct. 19 election to a “referendum about the course that David Eby has set” for housing, with Rustad “offering a completely different direction.”
Regardless of which party and leader emerges victorious, Yan said B.C.’s next government will be working against the clock, as well as cost pressures.
Yan said failing to deliver affordable homes for everyone, particularly people living on B.C. streets and young, working families, came at a cost to the whole province.
“It diminishes us as a society, but then also as an economy.”
This report by The Canadian Press was first published Oct. 17, 2024.
-
Politics21 hours ago
A look at Susan Holt, Liberal premier-designate of New Brunswick
-
News11 hours ago
Sentencing hearing continues for University of Waterloo gender studies class stabber
-
Politics21 hours ago
Here is the latest on the New Brunswick election
-
Politics21 hours ago
New Brunswick Liberals win majority, Susan Holt first woman to lead province
-
News4 hours ago
Toronto FC captain Jonathan Osorio making a difference off the pitch as well as on it
-
News10 hours ago
Inequality has broad impacts on the health of Montreal children, report finds
-
News21 hours ago
Premier-designate of New Brunswick, Susan Holt, is first woman to lead the province
-
Business11 hours ago
Thomson Reuters acquires AI accounting assistant developer Materia