Montreal 3-bed condo at C$1.796m and C$11,390/month: does the net return justify it?

[FriendlyLens]

I’m considering a Montreal 3-bed condo listed at C$1,796,000, with expected rent of C$11,390 per month. That produces a headline gross yield around 7.6%, but the spreadsheet becomes much less attractive once I include vacancy, management, routine maintenance and a reserve for one larger repair year.

The building appears sound, although the condo corporation’s reserves could materially alter the risk. Which local ownership cost am I most likely underestimating—property tax, insurance, condo charges, turnover or something else? Also, what net yield would make this worthwhile given the concentration in one high-rent tenant?

 

[SlowPath]

I’d focus first on the condo corporation rather than fine-tuning the vacancy percentage. A weak reserve can mean higher recurring charges or an unexpected owner contribution, either of which can erase a lot of yield. Model property tax, condo fees and unit insurance separately, then run a bad year with vacancy plus a building-related payment. If that version strains cash flow, 7.6% gross is doing too much of the sales work.

 

[cairn.common]

How firm is the C$11,390 rent figure? Is it backed by an existing lease, or is it an asking-rent estimate? For a single 3-bed, even a modest gap between expected and achieved rent matters more than trimming management costs.

 

[buildTheHarbor]

I wouldn’t automatically demand a particular net yield without knowing the financing. The same property can look acceptable with substantial equity and uncomfortable with debt that must be renewed at a higher rate.

Before deciding, I’d request the condo budget and reserve information, verify taxes and insurance, and test lower rent, tenant turnover, several vacant months and higher financing costs together. If the deal only works when C$11,390 arrives continuously and no large building expense occurs, I’d pass rather than treat those risks as independent.