10 Mar Montreal Investment Property Comparison
Montreal Investment Property Comparison
Montreal investment property comparison, determining which is the best type of property for you. Buying investment property is very personalized as each investor has their unique needs, budget and comfort level with renovations and maintenance. We’ll have a look at the four different types of investment property, revenue properties (duplexes triplex etc), condos, townhouses and single family homes. Multifamily is a specialized asset class that will be covered in it’s own blog post.
Let’s look at the Pros & Cons of each type of property:
Single Family Homes
Highest potential for appreciation,
Private form of ownership with freedom to do what you want with your property,
Larger green space such as a backyard and / or garden,
Spaciousness with multi bedrooms,
Great option for families and thus potential to receive high rent yields.
Expensive asset class to get into, especially in some of the more desirable neighborhoods
Likely to need some renovations which mean extra time and cost
Extensive maintenance and upkeep required
Repairs such a new roof or furnace system can be costly.
* As an investor, if you live in Quebec and are not averse to the high maintenance demands of a home, especially with our Montreal winters, then this might be a great investment. If you’re a non resident, this type of investment would require some property management. My recommendations would be to buy in a thriving and high demand neighborhood, close to transportation and some great school options.
More affordable than a single family home
Although it may not be as large as a detached home, they are still quite a bit more spacious than a traditonal condo apartment
Great option for families and will yield higher rent values than traditional condos.
Less maintenance than a detached house, some townhouses are classified as condos, making some of the common areas a shareable expense.
Private backyard area
More maintenance than a traditional apartment condo,
Higher repair costs than traditional condos
* Super option to consider with the same recommendations as listed above in the single family homes category. If you live in Quebec and are not averse to maintenance especially with our Montreal winters, then this could be a great investment. If you’re a non resident, this type of investment would require some property management. Buy in a thriving and high demand neighborhood, close to transportation and great schools.
Depending on the cap rate and rental yields, ideally your tenants can be paying off the property and you cash flow positive
If you’re living in your investment, the rent from your tenant can be substantially subsidizing your mortgage payment.
Good opportunity for appreciating over time, especially while the asset is ideally paying for itself
As a landlord, you’re responsible for the maintenance and repairs
Can require renovations to actualize it’s revenue potential
* Plexes are an extremely popular investment here in Montreal. They’re in high demand and Montreal is strong in this type of property option. If you’re looking to live in the property, the advantage is having your tenant (s) pay off a portion of your mortgage. Again, buy in an desirable, in demand neighborhood like the Mcgill Ghetto, Le Plateau, Rosemont Le Petit Patrie, etc. These neighborhoods also have micro sections with some areas performing better…much will depend on your budget. If you’re not comfortable with renovations and maintenance, this may not be the right type of investment for you.
Most affordable and accessible option. It’s possible to purchase a nice one bedroom condo for 350k, depending on the area
Least amount of maintenance, as the building and it’s common areas are most often professionally managed and overseen by a board of co-owners, depending on the size of the building.
Easy to rent, (ensure that the building rules allow and match your rental needs)
Makes a great pied a terre.
Profitable if held for a minimum of at least 5 years and more
Can have high condo fees
Less living space and storage
Indoor parking, if available, is not automatically included and often has an extra cost.
* Location, Location, Location! Buy in a fantastic neighborhood where there is a more limited supply. Thankfully, there are many great quartiers to choose from, some up and coming. One of my personal favorites is Old Montreal also known as Vieux Montréal or the Old Port. Bustling areas like Downtown, Old Montreal or Le Plateau are highly walkable and filled with wonderful shops, restaurants, bakeries and fun things to do. Very high condo fees will reduce your return your investment and resale opportunities. If you are a non resident investor or someone who travels alot, it may be prudent to invest in a larger condo building where there is strong and excellent management in place.