PLEX & RESIDENTIAL INVESTING
Plex investing, from an investor's view.
I've invested in residential properties myself. This section shares what I've learned: how to evaluate a duplex, triplex or fourplex without being guided only by gross income.
The concepts that matter
Income and expenses
Gross rent, vacancy, maintenance, taxes, insurance: profitability is calculated net, not gross.
Capitalization rate
The famous "cap rate": what it measures, what it ignores, and why it's not enough on its own.
Occupancy and leases
Leases at the Tribunal administratif du logement: rights, renewals and what you inherit at purchase.
Potential rent
What can realistically be increased, in what legal framework, and the impact on value.
Financing
Down payment, debt ratio, mortgage insurance: an investor and an owner-occupant aren't financed the same way.
Residential vs commercial
I practice residential brokerage. Commercial buildings require a separate licence I don't yet hold.
As an investor
We look first at profitability: net income, cap rate, vacancy and rent-increase potential. The decision is justified by the numbers.
As an owner-occupant
We look first at the living environment and your ability to carry the unit you occupy. Rents from other units help pay the loan, but don't alone define the decision.
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This section covers residential investing within the limits of residential brokerage. It is not financial, tax or legal advice and does not replace the relevant professionals.
