Buy your future home with an experienced broker

Buying a divided vs. undivided co-ownership

In Quebec, unlike other provinces, there are 2 types of residential condominiums: divided and undivided. In Montreal, undivided condominiums are found in certain areas such as Notre-Dame-de-Grâce, Outremont and Plateau-Mont-Royal. Divided condos are the most common in all sectors of the island of Montreal.

Divided: The building is divided into fractions (% share). Each fraction includes one or more private areas (apartment, parking, storage) with exclusive use and a share in the common areas.

Some spaces may be common, but for exclusive use (for example, a balcony adjoining the condo). All of this is governed by the declaration of co-ownership and the by-laws of the building.

Pros:

The minimum down payment of 5% and the possibility of financing at all lending institutions.
The high number of potential buyers.

Cons:

The high property and school tax bills.

Individed: Purchase of a percentage of a building between several owners. One cadastral number, one property tax account on all units. Governed by a convention of undivided owners.

Pros:

Lower purchase price than divided condos.
Taxes are generally lower than for divided condos.

Cons:

Minimum down payment of 20%; mortgage loan offered only by Desjardins and National Bank.
No repossession possible if your undivided condo is rented to a third party.

Buying an income property in Montreal

For several reasons, the purchase of a residential plex (2 to 5 units) is interesting for a future owner. Before highlighting the characteristics of this type of housing, here are the minimum requirements of the lender in terms of the down payment:

Owner occupant

Investor

Owner occupant

duplex

triplex

4 plex

5 plex

2-3-4 plex

Semi-commercial

10%

15-25%

20%

25-35%

Advantages:

Quick payment of your mortgage: In the case of a triplex, your rental income can cover 70% of your mortgage obligations.
Eligible deductions—of the rented portions—are numerous: property and school taxes, insurance, repairs, interest and bank fees, professional fees.
Financial leverage: The value of your plex will allow you to borrow for a future investment.
Secure and progressive economic value: 4% per year in central Montreal areas.

Disadvantages:

Tenant management: Selection and credit check, knowledge of leases and the rules of the Régie du logement du Québec.
Product in demand: For the past 5 years, supply hasn’t followed demand in the central sectors of the island. There is a decrease in the number of available plexes due, among other things, to the conversion to condominiums.
Aged housing stock: The majority of townhouse plexes were built between 1910 and 1925. Resources are required to renovate and maintain them. However, these costs are tax deductible.