analyze rental properties in Montreal , Canada

[Paulo Ascurra]

Good evening,

My name is Paulo and live in Montreal. I am very interested in rental properties. I have been following bigger pockets webinars for 2 months. When I try to analyze properties applying the four quadrant method, it does not work in Montreal because most of the time I have negative cash flow and the return on investment (cash on cash) is very low around 1-2% or negative. Rentals properties in Montreal are expensive; however, the rent that tenants pay is very low. An example: I found a very nice triplex very well situated close to the subway with minimum repairs to be done. The value of the property was $485,000 and the rent for each apartment was $640/month. I think I am missing some important points about how to do calculations in Montreal. I understand  US property values are cheaper and the rents are higher (depending on the area... I know). Could anyone give a suggestion how to approach rental real estate in Montreal?

[Mazen Al Ashkar]

Hi @Paulo Ascurra, 

Even though i have so much respect for @Guillaume D. and in general agree with what he mentioned, i do have somewhat a different suggestion. I find alot of people getting de-motivated too quickly because the "Numbers don't work". From my personal experience, i think you can still find good deals on the open market if you're willing to spend time on the deal. 

For example, a lot of sellers are still extremely motivated by the strong demand we've had in Montreal but if you're someone with a bit of patience and people skills, you can still close on a winning deal if you're taking the time to educate the sellers on where the market is now and how the numbers have to make some sense before placing an offer. 

You can obviously do this with the agent and without the agent. I've been having alot of success by targeting agents alone (Motivates them to close without having to split the commission) and also 4plex and 5plexes who are owner occupied. I always try to see the apartment where the owner lives and gives me a chance to say a few messages that i want to before i place an offer. 

Anyways, hope this helps a bit. I just wanted to make sure that you don't just pass on deals because you're sitting behind a laptop and only going after the deals that have the right numbers, because i can almost guarantee that you won't find it 

Cheers