Plex potential for Vaudreuil-Soulanges investors!
02 Mar 2020
If you’re looking to invest in real estate, you may assume it’s better to purchase rental property on the Island of Montreal, rather than out in the sticks.
After all, most jobs are in the city, and many renters are students or new immigrants who prefer to live near métro lines or areas with frequent bus service, rather than in a car-dependent community.
And it is true that while property values have skyrocketed on the Island over the past few years, the gains in Vaudreuil-Soulanges have been more modest.
In the last five years, the median value of a plex with two to five units in Montreal has jumped 30 per cent, to $600,000 in 2019 from $470,000 in 2015.
Off-Island (in Île-Perrot, Notre-Dame-de-l’Île-Perrot, Pincourt, St-Lazare, Hudson, Rigaud, S.-Zotique, and Vaudreuil-Dorion), plex prices increased by only 20 per cent over the same period, to $332,500 from a median price of $270,000.
But here’s the thing: the rise in property values in the city means it’s harder for landlords to find a property with rents that cover the monthly expenses.
Because rent increases are strictly controlled by the Régie du Logement, longtime tenants are now paying rents well below market rates. In some cases, the rents aren’t high enough to cover the landlord’s mortgage, tax and maintenance expenses.
Off-Island, it’s another story.
Royal LePage broker Sean Broady stated while it is still possible to find a cash-flow positive plex downtown, these gems are much easier to come by Off-Island.
Broady recently did a pulsecheck of the plex market here, and found that out of 10 randomly picked plex listings on the market in Vaudreuil-Soulanges, all of them were cash-flow positive — with earnings outstripping expenses by as much as $400 per month in some cases.
“I think for investors and for people who have the flexibility to live Off-Island, I think these revenue properties are a superb investment,” Broady said.
One property he found in St-Zotique, for example, was built in 2013 and was cash-flow positive by about $3,000 per year. Being more recently built, it would likely have fewer maintenance headaches than a 1930s-era plex in a hot neighbourhood like NDG — and at a much lower purchase price too, he said.
Broady said most of the plex listings he analyzed had tenants in place, many of them long-term tenants, which could be reassuring for landlords worried about finding tenants.
“I think the Off-Island is a bit of a hidden gem,” he said.
