You find yourself with a little extra capital, or the opportunity to borrow. Interest rates are right. You notice listings for a few attractive residential properties in the area, and your friends are bragging about how great their investments are working out. It might be your first time (don’t panic!) or maybe your fifth; either way, you need to stay informed on selecting the right income property in Montreal. This article should help you greatly.
The Right Mindset
Choosing a rental property requires a very different approach and frame of mind than when you bought your first home: your family’s residence. Your own specific tastes and personal preferences need to be put aside. You’re not going to live there yourself, but Mr. and Mrs. X will be. It comes down to finding the right tenants, keeping them, maximizing monthly revenues, minimizing expenses (including start-up costs), and potential resell value in the future.
If you’re buying a house or condo as an investment –to rent out for the long term– you need something with universal appeal, which will stay occupied as much as possible, and that provides a positive cash-flow. These types of ventures need to be treated like a small business, which means logic and strategy and calculations, not personal feelings.
So what should you consider first in selecting the right income property in Montreal?
Any experienced owner will tell you, the surrounding area and neighbourhood’s reputation are the property’s main selling point. The quality and features of the area have great impact over the value of your unit. If you’ve selected a family home, pick an area that is family-friendly: quiet, safe, and conveniently accessible by public transport. Being close to a good school is essential. Many young parents choose their next residence based largely on location of their children’s school.
If it’s going to be a condo, select one as close as possible to downtown or the business district.
These rates are not standardized and vary from one building to the next, and you need to be aware of how much you will be spending in taxes.
To be a good investment, a property needs to be an asset and not a liability. A good investor will factor in all categories of costs, including welcome taxes, land taxes, school taxes, and property taxes. This to determine whether the income property in Montreal will put money in their bank account every month, or take money out.
Research Urban Planning
Prior to making the investment, look into the city’s plans for the area you’re considering. If there are many new condos, shopping malls, or other large commercial developments forecasted near your street, there’s promise for growth. At the same time, remember that many new condo buildings will also represent competition for your space to rent.
High Vacancy and Properties for Sale
Check the levels of vacancies and houses/condos for sale in your surrounding region. A high number is a warning sign that should prompt you to research the reasons. Is it a seasonal effect? (such as rental homes near universities, which are often vacant during the summer) Is there a concern with the environment? A negative influence (undesirable business, crime, noise) lurking down the street? Too much construction (this is Montreal, after all) limiting traffic mobility? A major hospital, church, school shutting down?
If any of these are true, skip it and keep looking for that perfect income property in Montreal
What’s Included or Available?
The smartest income property in Montreal for a first-timer is often a single-family house or a condominium. Condos are low maintenance but gain value slower than houses. The best condo investments are made in buildings that offer the best commodities. The fact that your building offers a rooftop terrace, fitness centre, and swimming pool makes a big difference. Also, offering a garage is very attractive for residents. In Montreal, where weather is a huge concern, condo buyers are unanimous: a parking spot is very important.
If you opt for a small house, look for at least 2 bedrooms, as well as a backyard or large balcony/patio to enjoy the outdoors.
Appeal to the Masses
When shopping for an income property in Montreal, you should put aside all personal tastes and select a living space that may have more universal appeal. This means neutral colours, natural sunlight, hardwood flooring, and uncluttered decor. If you don’t plan on doing extensive renovation, choose an option that is already modern and convenient to the average buyer or renter. Large open spaces, big windows and open concept kitchens are extremely popular these days. Then don’t forget staging your fully furnished rental according to widely popular tastes, to allow for steady occupancy and higher monthly rental income.
Consult the Experts
All this being said, it’s always a smart idea to sit down and enlist the services of an experienced Real Estate Broker with good knowledge of the market. They will be able to guide you through the whole process, and shed light on other considerations you wouldn’t even think of. They’re plugged into current realities of the rental market, as well as trends for different property types all throughout the city. Truly the best first step in selecting your ideal income property in Montreal.