Are you an investor who’s always on the lookout for a golden opportunity? But how do you know if it’s really a bargain? Don’t wonder any longer! Rely on these 5 signs to know if you’ve found a golden opportunity in the Montreal real estate market, so you can better evaluate the properties available to you.
5 signs of a golden opportunity in the Montreal real estate market
No zoning or legal mortgage issues
Before investing in a property, it’s essential to do some research into the zoning of the land and any legal mortgages that may be attached to the building. If you’ve found a property you like, but it’s in the wrong zoning, you may find it impossible to carry out your plans. And don’t forget to investigate the legal mortgage! If, unfortunately, you buy a property with a legal mortgage attached, it will be your responsibility to pay it off. This type of unpleasant surprise can eat up a significant portion of your profits.
No major work required
If the property you like doesn’t have any major foundation problems, then it’s probably a good idea to make an offer, especially if it’s advertised at a good price! Even if the kitchen looks old-fashioned, you won’t need to replace it entirely unless it’s no longer functional or has been completely destroyed. You don’t have to follow the latest TV fashions and redo the kitchen and bathroom every time you buy a house. If you have the budget, great! There’s nothing wrong with taking the time to modernize a property, even if it takes years. Just make sure the property will be profitable before you invest any more money than necessary.
Asking price resembles estimated value
If a homeowner asks for an amount equal to or less than that found by a professional appraiser, it’s certainly a good deal! In fact, the market value of a property is usually between 10% and 25% above its professionally estimated value. However, be careful; a property advertised on the market at such a low price could have significant damage or a major reason why buyers are generally not interested. In short, you might just be lucky and have found a seller extremely motivated to sell his property in good condition, but you might also have found, for example, a bank-owned house that is damaged.
The 1% rule is respected
The 1% rule is often used by real estate investors to determine whether or not they have found a bargain. It is said that a property should be able to be rented at around 1% of its purchase price. For example, a home estimated to rent for $1,400 a month would ideally have to be purchased for $140,000 or less to be profitable. To value your property using the 1% rule, you’ll first need to analyze the market to find the right value for a local tenant.
Attractive facade
Is the property you’re interested in attractive in appearance? It’s the cherry on the sundae! A beautiful facade can save you hundreds or even thousands of dollars in renovations. When you visit, take the time to look around the property and make sure it’s square and healthy. And don’t forget to take a look at the roof! You want to see a nice, straight line. Sometimes a roof line is inconsistent due to past damage or major renovations. Other times, it simply doesn’t match the style of the building. Finally, the last thing to pay attention to is the condition of the exterior cladding. These small details will help you detect possible foundation problems.
If you’re a real estate investor looking for the deal of the century in Montreal, contact the Vendre Maison Vite team today at 514-320-1000. We’ll take care of the complex part of finding the ideal investment property. Just tell us what you’re looking for and we’ll e-mail you some options.
