5 Pros and Cons of Investing in Real Estate in Montreal

Montreal has a booming condo market, especially for investors who are interested in buildings with 300 units or more. Investors own 57 percent of these megaunits, compared to 30 percent of the units in buildings with less than 300 units.

Whether you want to purchase Montreal condos that sit in megaunits or you want something less ambitious, it’s important to understand the pros and cons of investing. Then, you will be ready to make an educated decision.

Pro – Predictable Market Trends

When you invest in Montreal condos, you can expect a predictable monthly cash flow. Long-term market trends dictate appreciation and market value, meaning you can make safe choices while cashing your monthly check.

Pro – Tax Benefits

If you’re interested in making money from investments, you likely have some tax considerations. Fortunately, investing in Montreal condos actually provides a tax benefit. You can deduct the expenses related to your investment, such as renovations, utilities, and management costs, from your income.

Pro – Capital Gain Income

Montreal condos appreciate at a steady rate. That means you can expect to earn a capital gain when you sell the condo. This capital gain is where many investors make the most money. You will have to pay a capital gains tax, but you can still expect a tidy profit upon the sale of the condo.

Con – A Time Commitment

Montreal condo and other investment properties require a time commitment from investors. You don’t just put time into buying the property. You also have to find a renter, manage the property, and provide repairs and upgrades when the tenant moves out. Of course, property management and repair companies are available to offset this time commitment. Those who have some extra money to spend can hand the reins over to these companies, so they can take a hands-off approach to the investment.

Con – Future Purchasing Power

Montreal condos and other properties are a good investment option for those who have a lot of capital or are happy in their primary residences. However, if you intend to move while holding onto your investment property, that could prove difficult. Mortgage companies look at the debt you carry when determining if you qualify for a new mortgage. If you hold a mortgage on a rental property, you could get denied a new mortgage.

This comes with a couple of caveats, though. You could always wait for the sale of your primary home and then purchase a new one.

In addition, owning a rental property could actually work in your favour when trying to get other loans. You could leverage the equity in the condo and use it to secure additional rental properties or even a new primary residence.

Choosing to enter the world of real estate investment is a personal decision. Weigh the pros and cons and determine if this is the best choice for your money. If it is, decide if you want to invest in Montreal condos or another property. Then, get started by purchasing your first rental property.

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