INVEST IN A PLEX? ME?
You are considering the purchase of a plex and you want to know if it will be a profitable investment and, above all, if you have what it takes for such a venture. You are absolutely right to ask these questions! Buying a plex can be a very profitable experience… from every angle. However, it also carries its load of risks and responsibilities. So, it’s best to get all the information you need so you can make an informed decision that will agree with you.
KNOWING WHY YOU ARE BUYING
The first question to ask yourself is: what goal do I want to achieve by buying a plex? Is it simply an investment: do I intend to live in it? Is it a means to contribute to my mortgage payments with my rental revenues? Are my goals for the short, medium or long term?
A seasoned investor who is only looking for a yield will thus compare the purchase of a plex to other types of investments. An owner-occupant will, more likely, bank on the appreciation of his investment over the long term and on a regular income from the rents over the years.
GETTING TO THE ROOT OF THE MATTER
Whatever your investment goals, caution is the word! For example, you must study the ratios that are currently used for this type of transaction to make sure that you are making a good purchase. In addition to experts in the field, first-time buyers of rental properties can consult web sites, property owners associations, investors groups, or buy books or even software on the subject. A well-informed buyer has better chances to find a good deal!
Of course, it is necessary to take into account other criteria such as the neighbourhood, access to public transportation and services, as well as other factors that will be “selling features” for potential tenants.
TAKING ADVANTAGE OF ALL THE AVAILABLE TOOLS
Did you find your dream duplex to buy as your first property but its price is slightly beyond what you can afford? The Home Ownership Program offered by the Ville de Montréal could help you. Is your heart pounding for a triplex on a quaint street but the building has known better days? It could be eligible for one of the financial assistance programs for renovations offered by the City. There are many tools to make your dream come true. Make sure to take advantage of them!
Finally, you must consider your own personality and decide if you are ready to take on the responsibilities that come with this type of property. Does the idea of collecting the rent from your tenants make you apprehensive? Does the word “hammer” bring to mind a shark species? Will the hunting season for new tenants trigger your allergies? It is better to be aware of this and to find solutions that will make your life easier. For example, you could retain the services of a manager that will run the building for you.
FOR MORE INFORMATION CLICK ON THE FOLLOWING LINKS (in french):
- Les plex sont-ils devenus une valeur refuge ? Le Devoir
- Un effort qui pourrait rapporter 100 000 $ Le Devoir
- Maison, immeuble, plex : foncer ou pas ? L’Actualité
- Objectif : rentabilité La Presse Affaires
- Trop tard pour les plex? La Presse Affaires
- Un plex à 15, voire à 20 fois les revenus: non, merci ! Le Devoir
- Posséder un plex : un atout s'il est payé à un juste prix Le Devoir