Buying rental property (condo) in Montreal?

[JROC]

Hi,

I have an opportunity to buy a rental property in Montreal. Downtown condo pre sale. Montreal is hot as far a appreciation goes for how long is another story.

Property will just cash flow.

I don't see any REIN research on the website in regards Montreal as a good place to invest, so I am questioning investing there.

Any thoughts on owning a rental in MTL?

 

[Thomas Beyer]

REIN traditionally has not covered Quebec. Condos generally speaking the worst investment option as little land per sq ft of apartment. Houses - generally speaking - a far better appreciation play if you can hold enough with enough income, incl THs, half-duplexes, suites homes etc

Land goes up in value in urban settings.

Presales can be a good idea but it can backfire like we see in Vancouver right now as market softens.

To give more insights one needs more insight: location, price today for comparable product, rents, timelines, price tomorrow, transportation improvements nearby, walkability score, closeness to shopping or university etc


Sent from my iPhone using myREINspace

 

[Matt Crowley]

Lots of research out there. PWC, CBRE, JLL, Avison Young, MoneySense.

Starting point: https://www.moneysense.ca/spend/real-estate/top-cities-canadian-real-estate-2018/

If I was looking at a pre-sale investment, I would consider:
- amount of supply approved (# units)
- location characteristics
- price point and market liquidity
- job growth and where in the city in the job growth
- how easy is the project to replicate (unique neighbourhood, amenities, retail)
- access to transit

A good position would have exits as a sale to a final buyer and to the rental market. In hot markets, some developers will withhold units so you will get some internal pricing pressure on your exit.

Also, Crombie, Interrent, and Northview Apartment REIT have pretty sizable allocations in Quebec with development pipelines. You might find better economics than direct condo investing. At minimum, looking at the Quebec forecasts will be pretty informative (just go the Investor Relations section and search for presentations).

 

[JROC]

REIN traditionally has not covered Quebec. Condos generally speaking the worst investment option as little land per sq ft of apartment. Houses - generally speaking - a far better appreciation play if you can hold enough with enough income, incl THs, half-duplexes, suites homes etc

Land goes up in value in urban settings.

Presales can be a good idea but it can backfire like we see in Vancouver right now as market softens.

To give more insights one needs more insight: location, price today for comparable product, rents, timelines, price tomorrow, transportation improvements nearby, walkability score, closeness to shopping or university etc


Sent from my iPhone using myREINspace

Thanks Thomas for responding.

Condo is located Downtown MTL at the Bell Centre. Subway is directly below. New highway being built into DT. Universities are all close by. Very high walk score. 2 blocks to St Catherines Street.

 

[JROC]

Lots of research out there. PWC, CBRE, JLL, Avison Young, MoneySense.

Starting point: https://www.moneysense.ca/spend/real-estate/top-cities-canadian-real-estate-2018/

If I was looking at a pre-sale investment, I would consider:
- amount of supply approved (# units)
- location characteristics
- price point and market liquidity
- job growth and where in the city in the job growth
- how easy is the project to replicate (unique neighbourhood, amenities, retail)
- access to transit

A good position would have exits as a sale to a final buyer and to the rental market. In hot markets, some developers will withhold units so you will get some internal pricing pressure on your exit.

Also, Crombie, Interrent, and Northview Apartment REIT have pretty sizable allocations in Quebec with development pipelines. You might find better economics than direct condo investing. At minimum, looking at the Quebec forecasts will be pretty informative (just go the Investor Relations section and search for presentations).

Thank you for responding.