All Forum Posts by: Benjamin Larouche

I assume they're advertising to a certain area or postal code. I haven't received any mail from them.

The market is getting very tight with stocks plummeting post-COVID. I know promoters are getting creative because mailers aren't working so well given the owners are innundated.

Notaries are acting under the Ordre des Notaires meaning that it is a protected and exclusive activity to their profession. They all have to study law but they branch off so some become notaries while others will pass the bar.

I was only looking at the data at a macro level to determine relevance for investing in an area. That being said, you can look at websites like Kijiji or marketplace to see if there are any ads in the are for Real estate to rent to see if something is stale. You can also register to groups like "spotted: TOWNxyz" or "TOWNxyz mon quartier" on Facebook - they're good indicators. If it doesn't seem stale, the 3% stated above would  be fair to present to a bank but I'd assume 5% for budgeting.

To avoid being laughed at at the bank, I wouldn't hesitate to reach out to an RE agent to confirm what I expect the vacancy rate to be in any given area.

I'm curious to hear what others have to say. I went the route of looking at demographics (in particular the ownership rate) to get a sense of the pool of tenants. I'm also looking at the overall economic outlook of that city (type of economy? Growth or not? Average/Median income? etc. Good luck!

Hello Ray and welcome to BP!

the Montreal market is a bit of a seller's market right now so it depends how you look at profitability. From a cashflow standpoint, it's very difficult to make something happen unless you significantly leverage an under-used property (example: adding a unit in a building in a basement, renting parking/storage space, etc.)) and/or purchase a fairly undesirable property and invest quite a bit to bring it up to snuff.

That being said, there's certainly something to be said for living cheaper and getting an opportunity to learn the trade.

If you think about it from the standpoint of price per door, owning a small plex (2-3 units) can still be interesting.

Example (desirable neighborhoods excluding DT, Verdun, Saint-Henri Plateau and Villeray)

2 br condo = +/-350k Cost per door: 350k

Duplex = +/- 550k Cost per door: 275k

Triplex = +/- 650k Cost per door: 217k

Because the bank will take into account the lease when looking at your ability to pay, you can apply for a larger mortgage with a plex and the cost per door comparatively goes down. You therefore own more real estate and are able to deduct some costs on your taxes (either as a percentage of occupancy or by splitting expenses related to the building vs your unit).

It's not for everyone because it does mean you'll have to invest some sweat equity unless you intend on servicing out the landlording.

If you're looking for maximum yield per dollar invested, look toward Mercier/Pointe-aux-trembles or similar areas where the properties can be 1/2 or 1/3 of the price of a comparable building/land in the Plateau or Villeray. This also means that you have to live there so I'll leave it up to you to decide if it's worthwhile.

Lastly, some investors are choosing to buy plexes because they can sometimes be converted in single family homes. Be aware that there has been some changes in legislation and certain burroughs are starting to crack down on that practice.

From an investment standpoint, commercial buildings (6+ doors) that are outside the reach of most retail buyers is where you'll find opportunity for cashflow because you won't have many buyers looking to buy such a property as an alternative to a condo or a single family home where the prices exceed the cost of building and cannot cashflow.

Forget generating a positive cashflow in those areas within the next 3 years unless you're buying something seriously distressed. Anything half-livable will get snatched up at retail price in the plex/single-family home market. The inventory is too low.

Options:
If you're accounting for the economy in your living situation, you can "cheat" yourself into a cashflow position. Ex: if I were to get into the real estate market in a condo for something similar, it would cost me roughly 1500$ per door. By purchasing a larger home with two dwellings, I can bring this down to roughly 1200$ per month, meaning I'm saving 300$ by living there. This is more of a value-add than a true cash flow position.

For actual cash-flowing properties, you have to look outside of the hotter markets (the ones you listed and downtown/Plateau/etc.). Even areas like Anjou and Lachine are starting to become very expensive. I would look towards Pointe-aux-trembles/Mercier/Longue-Pointe for cheaper areas at this time where you might be able to find a deal that you could cashflow after significant renovations. The same can probably said for Longueuil if you're hoping to stay near the subway line. Alternatively, you`ll have to look outside the island and the two surrounding areas for a serious discount on the purchase price of the property. Whether they`re a good place to invest for buy and hold is another story... I would look at Centris stats for information on the market (demographics growth/shrinking, ownership, average age, etc.) for any red flags for rental.

Also here from Montreal. Looking forward to meeting all of you in person at some of the events in the area!