Real Estate Talk:
Answers to your questions

Questions about your broker selling your home and best location to purchase an income property

By Joseph Marovitch

Over the past four years, I have received questions concerning selling, condos, inspection, the market and more. In this article, I thought it may be interesting to provide a few answers to the readers. These questions were asked by writing in the comment section and by people calling on the phone and by email. My coordinates can be found in the papers, online and in social media such as LinkedIn and Facebook.

Q: My home has been on the market a while and it appears my broker is not selling my home too quickly but amassing other listings around my property and selling around my property. Should I consider another broker?

A: If your property is priced too high, a selling broker – the broker that contacts your listing broker to request a visit – can use the high-priced property to sell other properties by bringing buyers to see your property and then taking their client to a visit a similar property in the same price range but in better condition with a higher city evaluation.

If your broker, the listing broker, thinks your property is priced too high, he or she should advise you, in writing, of the situation and offer a solution. However, if the advice is not adhered to, the listing broker will get buyers who find the price too high and then ask your broker if there are other listings they can see.

In this case, either the price had to be reduced or the right buyer had to be found. It all depends on the seller’s motivation.

The other day, I had a request to visit one of my properties. The selling broker arrived with the client and began to state, in front of the client, that the property had issues and required a total makeover. It immediately occurred to me that the selling broker had another property nearby, similarly priced, for the client to see and that the selling broker was using my property to sell the other property, which they were planning to visit right after. The visit lasted ten minutes. My property did require a makeover which would significantly increase the value, but the seller’s client was not searching for a renovator’s dream but rather a move-in property.

In this case, either the price had to be reduced or the right buyer had to be found. It all depends on the seller’s motivation.

Q: Where do you recommend is the best location to purchase an income property?

A: This is a complicated question. Wherever an income property is purchased, it should have a return of 5% or more. The closer to the core of a city, the more expensive the property will be and the less property a buyer can acquire. If one purchases a 16-unit apartment in NDG between Grand and Girouard, the cost can be as high as $2.5 million. The cost is higher and what is purchased has not as many units, but the rent is higher, and the tenants may be more congenial. As well, the value of the property may increase significantly faster in this area.

‘For a new investor with ample funding, starting an income property portfolio may be better in a good location with higher rents. For the seasoned investor, opportunity lies everywhere in Montreal.’

However, for $2.6 million, one can also pick up a 20-unit apartment building in Rosemont near the Olympic stadium. However, the rent will be lower, the tenants may be transient, meaning they will come and go quickly, and the property value will not increase as quickly. In other words, the buyer may have many more headaches.

For a new investor with ample funding, starting an income property portfolio may be better in a good location with higher rents. For the seasoned investor, opportunity lies everywhere in Montreal.

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This is all the room I have to provide written answers in this format, however, should you have questions, feel free to contact me anytime and I am happy to write back or speak on the phone.

Should you have questions or comments, please refer to the comments section at the bottom of the page. As well, to view past articles, go to the search link and type in Joseph Marovitch.

Have a great week!

Next article: Are condominiums a good investment in today’s market?

State of the market

For investors, the Montreal market is booming for several reasons such as low unemployment, low-interest rates and mainly because new inventory is decreasing as the island runs out of space. Low inventory and high local, national and international demand cause prices to increase.

The problem is we have a housing shortage. Many people cannot afford to buy a house. Many have purchased condos as a less expensive alternative though even condos are having significant price increases. The rest are renting. With a shortage of new construction and high prices, there are very few rental vacancies. The lack of rental unit supply is causing rents to rise and landlords to find ways to raise rents even more.

‘… there are rules and laws in place to protect tenants. However, many tenants do not know their rights nor where to go or who to call, or they do not have the financial means to obtain assistance.’

More and more landlords are finding ways to vacate old tenants so they can raise rents to the new market prices. Some landlords offer tenants money to leave, others renovate and offer tenants to vacate permanently. Other landlords state that a family member is taking the unit and therefore the tenant must vacate. In every situation I just referred to, there are rules and laws in place to protect tenants. However, many tenants do not know their rights nor where to go or who to call, or they do not have the financial means to obtain assistance.

In Montreal, the Régie du logement is the organization to contact. There is plenty of information regarding tenant rights to be found on their website at rdl.gouv.qc.ca/

Tenants can also contact the Régie at the following coordinates:

Régie du logement
1425 Boul. René-Lévesque O, Bureau 600
Montreal, Quebec
H3G 1T7
514 873-2245

Image: Andrew Burlone

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