Rental deal in Montreal: C$283,500 purchase, C$2,076/month — sanity check

[hana.slate]

I would like the numbers to support this purchase, but the 8.8% gross yield may be doing too much of the work. The property is a four-bedroom country home near Montreal at C$283,500, with projected rent of C$2,076 a month.

I have allowed for vacancies, management, normal upkeep and a substantial repair, yet tenant changeovers could be both longer and more expensive than my model assumes. Property tax and insurance are still estimates as well. Which figures would you insist on verifying before treating the rent as credible? I am also considering a combined stress test with lower rent, an extra vacant month and higher financing costs rather than choosing a net-yield target in isolation.

 

[arlo.miles]

Before choosing a target net yield, I’d clarify who pays heating, snow removal and grounds upkeep. On a country home, those can be meaningful or can affect tenant demand even when they are technically the tenant’s responsibility. I’d also replace estimates with actual property-tax and insurance figures for this address. Is C$2,076 based on an existing tenancy or merely expected market rent?

 

[buildTheThread]

I’d worry less about routine management and more about the combination of turnover and a major repair. A 4-bed may take longer and cost more to prepare between tenants than a smaller unit, so a simple vacancy percentage can hide the timing risk.

I wouldn’t set a universal net-yield threshold without seeing the financing. Run the deal with one extra vacant month, a lower achieved rent, higher insurance, and the large repair occurring early. If cash flow survives those together, the 8.8% gross figure becomes more persuasive.