Any investment requires diligent research in order to make an informed decision. In Quebec’s real estate industry, it is important to determine whether it is advised or not to make such investment and avoid the risk of losing your savings.
When purchasing a condo, we recommend you to foresee all the requirements and drawbacks. In order to get a clear picture, you must evaluate long-term costs to avoid short-term disaster.
Before buying a property, you must evaluate the related expenses
In many cases, novice investors do not properly budget all possible expenses, lack in cost effectiveness, and run out of solutions.
In order to properly budget, you have to consider all the expenses, on top of the condo mortgage itself: municipal taxes, school taxes, condo co-ownership fees as well as all the eventual renovations and maintenance fees for the next five (5) years. Instead, you should consider the option of buying a new condo, which can save you a lot of money compared to renovation fees of certain condo units.
Consult the article: What constitutes a co-ownership syndicate? (In French only)
Before purchasing a condo for leasing purposes, it is mandatory to ensure that the building allows for that kind of projects, since certain condominium buildings do not permit short-term or long-term condo rentals. Ask for a copy of the co-ownership declaration and have your notary look at it in order to learn if you can carry out your project or not. Make sure to include the notary fees in your expenditure budget.
Some people do not give proper consideration to a condo and decide not to have it inspected, WHICH IS TOTALLY WRONG. You have to include inspection fees in your budget since this could ultimately help you save thousands of dollars.
Keep your down payment to a minimum and maintain some emergency savings, since unexpected expenses may arise. Again, make sure to book a residential inspection for your property, even if it is a condo.
Finally, if you are a first-time home buyer, we recommend you to seek expert advice from a real estate broker in order to evaluate your project’s cost effectiveness and properly set your expectations. You can also consult the Régie du logement du Québec Tools for fixing the Rent.
Carefully choose YOUR sector before purchasing a condo
The sector exercises influence over cost effectiveness (The Montreal or Gatineau Region?). Thus, you must assess the selected neighborhood: Does this sector provide accessible public transportation? Are there any rented condos in this area? Compare your condo with the ones on the market in this particular neighborhood.
Are there any parks or elementary schools nearby? If so, such areas are often targeted by young families wanting to rent a property.
Ask yourself the right questions in order to determine whether it is worth it or not to purchase a condo and rent it. Remember that you will become the owner of such condo and that it can be time-consuming.