Most Montreal Condo Investors are Paying Out More than they Make in Rent
The Montreal skyline as seen from Mount Royal. A new report from the Canada Mortgage and Housing Corp. suggests that the majority of landlord investors who bought properties in large, high-rise condominium buildings in downtown Montreal are not collecting enough rent to recoup their operating expenses.
TORONTO — A report by Canada Mortgage and Housing Corp. suggests a majority of landlord investors who bought properties in large, high-rise condominium buildings in downtown Montreal are not collecting enough rent to recoup their operating expenses.
The national housing agency estimates that investors who made a 20 per cent down payment on their properties are spending more on mortgage payments, condo fees and property and school taxes than the amount they receive in rental income.
The report suggests the owners of 75 per cent of the 375 rented condominiums it examined from Quebec’s property listing service, Centris, experienced negative cash-flow. It found that in this scenario, operating expenses on average, exceeded rent by $385 a month.
CMHC noted the conclusions were theoretical and could vary due to a number of other factors that were not taken into consideration for the report, including whether the owners put down a down payment larger than 20 per cent or if the unit was purchased with cash.
CMHC economist Francis Cortellino, the report’s author, says the ultimate hope for these investors is that their costs would be recouped in the resale of the condo, if market conditions continue to tighten and favour sellers.