Investment

Building a Real Estate Portfolio, Montreal

By Georges Matar · May 26, 2026 · 6 min read

You buy the first building with your salary. You buy the second one with the rules. What makes a first plex accessible in Greater Montreal is exactly what disappears when you go looking for a second one.

This article starts where the first income property guide stops. General information only: check your case with a lender and an accountant.

Why the first building is the easiest to finance

CMHC insures the owner who lives in the building generously, and the absentee investor much less.

Situation	Minimum down payment	Insured loan up to
1 or 2 units, you live there	5% of the first $500,000, 10% on the rest	95%
3 or 4 units, you live there	10%	90%
2 to 4 units, you do not live there	20%	80%

The first two rows require a price under $1,500,000 and a unit occupied by you, or rent-free by your spouse or common-law partner, your parent or your child. The third is CMHC Income Property: price under $1,000,000, credit score of at least 600, and a 25-year amortization cap.

So the same triplex asks 10% while you live in it and 20% the day you move out.

The stress test and the lender you pick

The rate you qualify at is not the rate you pay. The Office of the Superintendent of Financial Institutions (OSFI) requires federally regulated lenders to use a minimum qualifying rate: the greater of your contract rate plus 2%, or 5.25%. It still stands in 2026, and CMHC applies the same qualifying rate to Income Property. With insurance, you get tested either way.

Quebec’s financial services cooperatives, on the other hand, answer to the Autorité des marchés financiers rather than OSFI. But since 2021 the AMF has required them to use the same qualifying rate on uninsured loans. Other criteria, such as ratios or how rents are counted, vary from one lender to another: your lender can walk you through them, and a mortgage broker can compare them.

Add CMHC’s ratios, 39% and 44% of gross income, and your credit score.

How a lender counts your rents

Owner-occupied duplex: up to 100% of gross rents is added to your income.
Owner-occupied triplex or fourplex: 50% of gross rents, or the net rental income method.
Non-owner-occupied building the loan is for: up to 50% of gross rents, or net rental income, meaning gross rents minus operating expenses.
Buildings you already own: according to the lender’s policy.

On the first building, owner-occupied, part of the rents makes you look richer. On the second, the lender counts at most half of gross rents, or net income, and the first building’s payment stays on your balance sheet. A plex with thin cash flow does not help you buy the next one, it blocks you. The rental management guide breaks those expenses down.

Finding the down payment for the next one

According to the Financial Consumer Agency of Canada, you may usually borrow up to 80% of your home’s value, all mortgage debt combined, and no more than 65% through a home equity line of credit.

That ceiling holds no matter how much the property has appreciated. And since a loan at 80% or less is not insured, you land back under OSFI’s stress test.
Your equity is not your down payment: if a mortgage still sits at 60% of value, you have 20 points left, not 40.
The line of credit costs you twice: in interest, and in a drawn balance that counts in the next lender’s ratios.

Add the prepayment penalty, the appraisal, the notary and the welcome tax. Test the whole thing with the mortgage calculator and the affordability calculator.

Amortization, premium and real cost

An insured loan is capped at 25 years of amortization. Since December 15, 2024, Ottawa allows 30 years for first-time buyers and for buyers of newly built homes. On a non-owner-occupied building, it is 25 years.

On premiums, CMHC charges an owner-occupant 2.40% up to 80% of value, 2.80% to 85%, 3.10% to 90% and 4.00% to 95%. More than 25 years of amortization adds 0.20%. On a non-owner-occupied building: 1.45% up to 65%, 2.00% to 75%, 2.90% to 80%.

The premium is added to the loan, but the 9% Quebec tax on it is paid in cash at the notary, and Revenu Québec has confirmed it rises to 9.975% for premiums paid after December 31, 2026. See the 20% down payment myth.

Rents are not an adjustment lever

The most expensive mistake is buying on the assumption that you will raise rents to market. You are not the one who decides.

Since January 1, 2026, the Tribunal administratif du logement applies a simplified rent-setting method to modification notices given from that date. The base is the three-year average of Quebec’s consumer price index, 3.1% between April 2, 2026 and April 1, 2027. Added to it: the share of tax and insurance increases above that base, and major work, recovered at 5% a year. The TAL publishes its calculation tool.

The moratorium. Until June 6, 2027, no tenant may be evicted for subdivision, substantial enlargement or a change of use.

Repossession. It covers you, your parents, your children or a relative you support, with notice at least 6 months before the end of a 12-month lease. A tenant aged 65 or over, in place for 10 years and whose income does not exceed 125% of the low-rental housing threshold, is protected, with exceptions. In undivided co-ownership with a third party, repossession is in principle impossible.

A portfolio is built on the rents in place today, not on the ones you hope to charge tomorrow.

Taxes on the second building

Rents are reported federally on form T776 and in Quebec on form TP-128.

Current or capital. Repairing a step is deducted the same year. Replacing the staircase is a capital expense: it is added to the building’s cost and deducted slowly. The CRA publishes the criteria.

Capital cost allowance. A rental building is Class 1 property, depreciable at 4% a year. The deduction is optional, applies to the building and not the land, and cannot create or increase a rental loss. On resale, the CCA you claimed can be recaptured into your income.

Personally or through a corporation? For the CRA, a business whose principal purpose is deriving income from property, rents for instance, is a specified investment business: its income does not qualify for the small business deduction unless the corporation employs more than five full-time employees all year. No automatic tax shortcut, then, but an accountant’s call.

The risks a portfolio amplifies

Vacancy. In its 2025 Rental Market Report, CMHC measured a 2.9% vacancy rate for purpose-built rental apartments in the Montreal area.
A tenant who stops paying. A TAL case takes time, and the mortgage payment goes out anyway.
Major work. Roof, windows, plumbing: these arrive in blocks and are only recovered at 5% a year.
Municipal taxes. A new assessment roll can push the bill up. See property taxes in Montreal and Laval.

The more buildings you own, the more these events overlap. A cash reserve is what keeps you an owner.

You own one building and want to know what the second would really take? Write to me: we look at your leases, your equity and your ratios before you shop.