Our Advice for Purchasing a Multi-Unit Building

Our Advice for Purchasing a Multi-Unit Building

Many people are interested in becoming owners of an income-generating duplex, triplex or quadruplex. Indeed, these multi-unit residences offer quite a few advantages.

 

Some property owners even buy several multiplexes to have a little extra money at the end of the month and to provide for their retirement income. However, acquiring a multi-family residence is a major decision that shouldn’t be taken lightly. Here is our advice to help you make an informed purchase. 

Meet All the Tenants

Before you buy a multi-unit building, get to know the people who live there. Talking to the residents is a great way of gathering relevant information that might raise alarm bells to potential issues. Ask them questions, particularly about any problems between neighbours or any needed renovations. It can also be enlightening to find out how long they have resided there and to make sure that the present owner has no difficulty collecting rents. 

Understand That You Are Acquiring a Small Business

It is imperative you realize that multiplex owners are essentially entrepreneurs running a business. You will be in charge of all operations, including human relations, i.e. you will have to ensure that everyone in the building gets along and that each resident’s particular needs are met. You will also have to take care of the administrative tasks (unless you hire a professional to manage the accounting).

Inspect Each Apartment

Take the time to visit every apartment in the building to get a general idea of what work needs to be done and how much it will cost. You should likewise hire a qualified professional to carry out a formal inspection. It’s best to be aware beforehand of any foundation, water infiltration and mould issues! Moreover, you can use this information to your advantage when negotiating the price. 

Research the Neighbourhood

Getting to know the community is also excellent advice. Some people may be scared off by a neighbourhood’s high crime rate, for example. Although, homes in less desirable sectors may be more affordable. Every situation offers its unique set of advantages, and you have to see what works for you. Likewise, focus your property search on areas that are in high demand by tenants. It will then be far easier for you to quickly rent an empty unit at an advantageous rate.

Carry Out All Necessary Checks

Don’t forget to contact city hall to confirm that all taxes have been paid and to check if any infraction notices have been issued. Equally, call the Régie du bâtiment and the Régie du logement to check that everything is in order. If a complaint for unpaid rent has been lodged, you will want to know! At the same time, find out what restrictions the Régie de logement has imposed. For example, understand that simply because a unit’s rent is far lower than the market rate does not mean you can raise it as you see fit. There are rules you must follow. Get all the facts!

Read the Leases

You may not like some of the written agreements included in the leases. For example, the former owner may have given a tenant the permission to use the backyard or swim in their pool. It’s best to know beforehand to avoid unpleasant surprises.

Live in the Building

The value of multiplexes has continuously increased over the past twenty years. This type of real estate is definitely a worthwhile investment; however, high property prices make in difficult to generate a good return. A sensible solution for effortlessly saving money is to live in one of your own building’s apartments.

To summarize, purchasing a multi-unit residence requires time as well as people management and administration skills. And yet, it can be a thrilling adventure full of exciting challenges. To make sure you make an informed decision, team up with a real estate broker.

RE/MAX Québec

By RE/MAX Québec

By RE/MAX Québec

A leader in the real estate industry since 1982, the RE/MAX network brings together the most efficient brokers.