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Estimate a plex →Investing in a plex in Montreal is one of the most popular real estate strategies in Quebec. With the median plex price at $855,000 (+9% year-over-year), a 5-year fixed rate around ~3.69%, and the Bank of Canada policy rate at 2.75%, understanding how to calculate return on investment is essential before making such a significant purchase. This guide walks you through the key formulas, real-world examples, and practical considerations.
📊 Key Return Formulas for Plex Investors
There are several ways to measure the profitability of a plex. Here are the three most important metrics every investor should know:
Gross Rental Yield
(Annual Rent ÷ Price) × 100
Quick initial screening metric
Doesn't include expenses
Cap Rate
(NOI ÷ Price) × 100
Net of operating expenses
Ignores financing method
Cash-on-Cash Return
(Net Cash Flow ÷ Cash In) × 100
Return on your actual cash invested
Most practical metric
💡 Pro tip: NOI (Net Operating Income) = Gross Rental Income minus Operating Expenses (property taxes, insurance, maintenance, vacancy allowance). It does not include mortgage payments — that's what differentiates cap rate from cash-on-cash return.
🧮 Calculation Example: Plex at $855,000
Let's walk through a real example using the QPAREB median plex price of $855,000 with a 5-year fixed rate of ~3.69%:
🏠 Example: Duplex at $855,000
Purchase price: $855,000
Down payment (10%): $60,500
Mortgage: $794,500
CMHC premium (3.10%): $24,630
Rate (5-yr fixed): ~3.69%
Monthly mortgage: ~$4,160
Total rental income: ~$3,600/mo
Owner-occupied: 1 unit
Gross Rental Yield
~5.1%
($43,200 ÷ $855,000)
Monthly rental income
$3,600
From non-owner units
Your net housing cost
~$560
Mortgage minus rental income
⚠️ Don't forget expenses: property taxes (~$4,000–$6,000/yr), insurance (~$2,000–$3,000/yr), maintenance reserve (3–5% of rent), and vacancy allowance (3–5%). These significantly impact your net return.
🏠 Duplex vs Triplex: Which Is Better?
Both duplex and triplex investments have their merits. The best choice depends on your budget, risk tolerance, and investment goals:
Duplex
✅ Lower purchase price
✅ Easier financing
✅ Simpler management (1 tenant)
❌ Lower total rental income
❌ Higher risk if tenant vacates
Triplex
✅ Higher total rental income
✅ Better gross yield typically
✅ Diversified tenant risk
❌ Higher purchase price
❌ More management effort
💡 Owner-occupied advantage: when you live in one unit of a 2–4 unit plex, you qualify for a lower down payment (as low as 5% under $500K) compared to a purely investment property (20% minimum). This makes owner-occupied plexes an excellent entry point for new investors.
🏦 How to Finance a Plex in Quebec
Financing a plex follows similar rules as a single-family home, with some important distinctions:
✅ Under $500,000 — Minimum 5% down payment (owner-occupied)
✅ $500,001 to $999,999 — 5% on first $500K + 10% on the remainder (owner-occupied)
✅ Rental-only (not owner-occupied) — Minimum 20% down payment required
✅ CMHC insurance — Required with less than 20% down, premium 3.10–4.00%
Down payment for a median plex at $855,000
$60,500
Minimum (owner-occupied)
5% on $500K + 10% on $355K
$171,000
20% (no insurance)
Avoids CMHC premium
~3.69%
5-year fixed rate
March 2026
🧮 Estimate the value of a plex you're considering
Free plex estimate →📍 Best Neighbourhoods for Plex Investment
Location is everything in real estate investing. The best plex neighbourhoods balance affordability, rental demand, and appreciation potential:
🌟 Established
Rosemont–La Petite-Patrie
Villeray–Saint-Michel
Verdun
🚀 Emerging
Hochelaga-Maisonneuve
Parc-Extension
Pointe-aux-Trembles
💰 Value plays
Montreal Nord
Saint-Léonard
Anjou
⚠️ Due diligence: always analyze the specific property's rental income potential, condition, and expenses. Neighbourhood-level trends are helpful, but each plex is unique. A pre-purchase inspection is essential for any plex investment.
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