In an inflationary market, is it (still) a good idea to purchase an income property? Is the Eastern Townships (maison a vendre Sherbrooke) a good region to invest in? Here’s a quick overview.
Buying advice
At the moment, the Eastern Townships income property market is booming. “Properties are still selling for significantly less than in major cities like Montreal, Laval, Gatineau, or Quebec City, so many buyers from outside the region are purchasing here. This creates strong demand in the Eastern Townships,” explains Jason Smith-Kingdon, a residential and commercial real estate broker.
In recent years, the region has also become increasingly attractive because of its quality of life, natural surroundings, and growing economic activity. Many families and professionals are leaving larger urban centers in search of more affordable housing and a quieter lifestyle, which continues to support the local real estate market.
Prices catching up with major cities
That said, the average price of properties in the region is rising fairly quickly and beginning to catch up with those in larger cities (evaluation valeurpropriete). “The increase has, of course, accelerated since the pandemic, and while Montreal is starting to level off, here the trend is continuing,” says Jason. “You have to be a bit more patient than you did 10 years ago to make your purchase profitable, unless you’re doing flips*. But the investment remains profitable—and it’s more profitable today than it will be in a year, and more in a year than in two—which creates a sense of urgency among buyers.”
As a result, properties with four units or fewer are selling very quickly. As for larger buildings, each case is unique. “But if the price is attractive, they sell very fast,” Jason adds.
Who can buy an income property?
Higher property prices mean larger down payments. In this context, is buying income properties reserved for people who are already well-off? “Not necessarily,” Jason says. “Some people pool their resources. For example, I recently sold two income properties in East Angus to three young women in their twenties who decided to combine their assets. I also sometimes sell properties to two couples who have agreed to make a joint purchase.”
According to the broker, a very smart move is to buy a property such as a duplex or triplex as a first home: you can live in one unit and rent out the others. “Instead of buying a first property for $400,000, for example, you could buy a duplex for $525,000 and rent out the second unit. It’s a great way to build wealth for the years ahead.”
Jason Smith-Kingdon also points out that creating a company is not mandatory to own an income property. “There are several options. The best first step is to consult a specialist, such as a tax advisor. They can give you a clear picture of your situation, what types of transactions you can make, and what would be most advantageous for you.”
* Real estate flipping involves buying properties, renovating them, and then reselling them for profit.
