2 to 4 unit property
Found abundantly throughout Quebec and even more so in the Greater Montreal area, this type of property is often seen as an ideal entry point for those who wish to acquire an income property.
Often much easier to finance, manage and maintain, these small rental properties are the perfect product to begin learning about multi-property real estate investment.
Whether it’s for a duplex, triplex or quadruplex, there is a wide array of available options on the market. Moreover, buyers and sellers are present on the market throughout the year.
For many, this type of property offers the possibility of being used in an « owner-occupancy » formula. This option gives one or several people the opportunity to live in a high value property and to profit over time. With the perception of monthly rent, it becomes possible for the owner to significantly reduce their living costs.
The assessment method used for this type of building is that of parity. Although the average gross income is also taken into account, the actual value of this type of building is mainly established through the study of sectorial indices.
5 to 11 unit property
A large number of residential buildings of 5 to 11 units also exists in Quebec. This type of property is the next logical step for a real estate investor that’s looking to start acquiring rental properties faster and in bigger quantity.
Managing this type or property remains easy and accessible. An investor with a more substantial down payment could therefore choose to acquire such a property as a first multi-residential investment experience.
These properties represent the official gateway into the world of multi-unit housing for the financial institutions as well as the CMHC. Various financing options and strategies then become available to investors and owners of this type of building. Therefore, it is essential to be well represented by seasoned specialists at this crucial stage.
The value of this type of property is assessed with the use of the GRM method (Gross Revenue Multiplier). A rigorous analysis of this variable allows us to determine, with great precision, the economic market value of such a property during a specific period.
12 + unit property
Whether they are constructed with wood and brick or concrete, these types of properties can include one of many elevator systems, indoor parking or common areas.
Those properties are best suited for experienced managers, who often own many other buildings and have already implemented a more advanced organizational structure. The various operations relative to the management of these properties can often be performed with the help of janitors, a maintenance crew or an external manager.
The value of this type of building is determined using the Cap Rate method. Loaners, the CMHC and the market use this financial variable to establish its exact value.
Since their market value is directly linked to their performance, maximizing income and achieving optimal control of expenses become the most important challenges faced by investors and owners of this type of property.