The real cost of holding an investment property in Québec 2026.

The number on the listing is gross rent. You live on net.

Gross rent is what the tenant pays. Net cash flow is what's left after every recurring cost of ownership, including the mortgage. Those are different numbers, and the gap between them is usually much larger than first-time investors expect.

Here's the full list of what sits between the two.

Condo fees

If you're buying a condominium, this is often the single largest carrying cost after the mortgage — and it's easy to underweight because it's a flat monthly number that doesn't feel connected to anything.

Condo fees fund the building's operating budget and its contingency fund. A $550/month fee is $6,600 a year, full stop, whether the unit is rented or sitting empty for a month. Fees can also increase year over year, sometimes significantly if the building has deferred maintenance catching up to it — which is exactly why reviewing the condo documents matters before you buy, not after.

Municipal and school taxes

Two separate tax bills, both annual, both non-negotiable. On a typical Montréal-area condo in the $500,000 range, combined municipal and school taxes commonly run $3,000–$4,000 a year depending on the borough and the property's assessed value. These are deductible against rental income, but they're still cash going out the door every year regardless of what the tenant pays.

Insurance

Landlord insurance is not the same policy as an owner-occupant would carry, and it costs more — typically in the $700–$1,000/year range for a condo unit, more for a plex or a property with higher liability exposure. This is a real, recurring cost that rarely appears in a rough cash flow estimate.

Vacancy allowance

No unit stays rented one hundred percent of the time. Tenants move, units sit between leases, and even a well-managed property will have some gap eventually. A reasonable allowance is roughly 3–5% of annual rent — meaning you should plan for the equivalent of one to two weeks of vacancy per year, even if it doesn't happen every year.

Skipping this line item is the single most common way a new investor's spreadsheet looks better than reality. The vacancy cost doesn't disappear just because you didn't budget for it — it just shows up as a surprise instead of a plan.

Maintenance and repairs

Appliances break. Plumbing needs attention. A condo with a well-funded contingency fund pushes the big-ticket items — roof, windows, elevators — onto the building's budget rather than yours, but unit-level maintenance is still yours: a fridge that dies, a faucet that needs replacing, a paint job between tenants.

A common planning figure is 5% of annual rent set aside for maintenance, adjusted up for an older building or a unit that hasn't been renovated recently.

Property management, if you use it

If you're not self-managing, factor in 5–10% of collected rent for a property manager, or a flat monthly fee for something like SASSOON Landlord Support. Even if you plan to self-manage, it's worth pricing this in as an opportunity cost — your own time has value, and burnout is a real reason investors sell properties they should have kept.

The mortgage — principal and interest, separated

This is the cost most investors do understand, but it's worth being precise about what it actually is. Your mortgage payment is not one expense — it's two, blended together. The interest portion is a real cost. The principal portion is forced savings; it reduces what you owe and builds equity, but it's still cash leaving your account every month regardless of what category it belongs to on a tax return.

For cash flow purposes, the full mortgage payment counts as an outflow. For long-term return purposes, the principal portion is building wealth even in a month where cash flow is negative.

A worked example

Here's what this looks like on a representative Montréal-area condo, using round, realistic numbers rather than a specific listing.

The property: $500,000 purchase price, renting at $2,200/month.

Financing: 20% down ($100,000), $400,000 mortgage, 4.75% rate, 25-year amortization. Monthly payment: approximately $2,280. Annual: approximately $27,366.

Annual income: gross rent $26,400.

Net operating income (before mortgage): $26,400 − $13,162 = $13,238.

That's the number a cap rate is built on: $13,238 ÷ $500,000 = 2.65% cap rate.

Now add the mortgage. Cash flow after debt service: $13,238 − $27,366 = −$14,128 per year, or roughly −$1,177 per month.

On $100,000 of cash invested, that's a cash-on-cash return of approximately −14%.

What that example actually tells you

This is not a bad property. It's a completely ordinary one at current rates and a conventional down payment. The point isn't that this specific math is universal — change the down payment, the rate, or the rent, and the picture changes with it. The point is that the gap between gross rent and real cash flow is often larger than people expect, and the only way to know where you stand is to run every line, not just the ones that make the deal look good.

A few things shift the picture meaningfully:

• A larger down payment reduces the mortgage payment directly. Putting 35% down instead of 20% on the same property cuts the annual mortgage payment substantially and can turn negative cash flow positive, at the cost of tying up more capital.
• Rent that's genuinely below market changes everything. If the unit is under-rented relative to comparable units, there may be real upside once the lease turns over — but that's a projection, not today's cash flow, and shouldn't be treated as the same thing.
• A building with strong reserves and stable fees reduces the risk of a special assessment landing on top of an already tight cash flow picture. This is exactly why the condo documents matter as much as the price.

Cap rate versus cash-on-cash, one more time

These two numbers answer different questions, and conflating them is where a lot of investors get into trouble.

Cap rate measures the property, independent of financing. It's useful for comparing buildings against each other, and it's the number sellers tend to lead with because financing doesn't drag it down.

Cash-on-cash return measures your actual money. It includes the mortgage, and it's the number that tells you whether the property is putting cash in your pocket or taking it out, every single month.

A property can have a perfectly respectable cap rate and a deeply negative cash-on-cash return in the same breath — as the example above shows. Neither number is wrong. They're just answering different questions, and an investor who only asks one of them is missing half the picture.

Negative cash flow isn't automatically a bad investment

This is worth saying plainly, because it cuts against the instinct to treat any negative number as a red flag.

Some investors buy negative-cash-flow properties deliberately, betting on appreciation, on a future rent increase once a below-market lease turns over, or on the long-term equity building through mortgage paydown even while the monthly number is red. That can be a legitimate strategy — for someone with the income to comfortably absorb the monthly gap, and who understands exactly what they're signing up for.

What's not legitimate is not knowing the number exists until after closing. The property doesn't care whether you budgeted for negative cash flow or discovered it by surprise three months in — the number is the same either way. The only difference is whether you planned for it.

The short version

• The rent on the listing is gross income, not what you'll actually keep
• Condo fees, taxes, and insurance are fixed costs whether the unit is occupied or not
• Budget 3–5% of annual rent for vacancy, even in a good year
• Budget roughly 5% for maintenance, more on an older or unrenovated unit
• Separate the mortgage payment from every other operating cost when calculating cap rate
• Cap rate measures the property; cash-on-cash measures your actual money
• Negative cash flow can be a deliberate, reasonable strategy — but only if you knew about it before you bought

Run every line before you write the offer. The rent number was never the whole story — it was just the number that made the story worth telling.