Cashflow is the lifeblood of any real estate investor. Before buying a plex in Quebec, you need to master the complete formula and apply it with realistic numbers. Here is a guide based on 2026 CMHC and QPAREB data.
1. Cashflow formula
The cashflow formula for a rental property is simple in theory, but each component must be estimated accurately:
Cashflow = Gross Rental Income − (Mortgage + Taxes + Insurance + Maintenance + Vacancy + Management)
Gross rental income
Total monthly rent from all units, before deductions.
Mortgage
Monthly payment based on amount borrowed, rate and amortization (typically 25 years).
Municipal and school taxes
Property taxes divided by 12. Vary by municipality (0.8% to 1.2% of value).
Insurance
Non-owner-occupied landlord insurance. Budget $200 to $350/month for a triplex.
Maintenance (1% rule)
Reserve of 1% of the property value per year for repairs and preventive maintenance.
Vacancy (3% to 5%)
Allowance for periods without tenants. 3% is conservative in tight markets.
2. Real triplex example in Montreal
Let’s apply the formula to a typical Montreal triplex in 2026:
Triplex — $650,000 in Montreal
Revenue
• 3 units × $1,450/month = $4,350/month
• Gross annual income: $52,200
Monthly expenses
• Mortgage (20% down, 4.5%, 25 years): $2,876/month
• Municipal and school taxes: $540/month
• Insurance: $250/month
• Maintenance (1% annual): $542/month
• Vacancy (3%): $131/month
• Total expenses (before management): $4,339/month
Cashflow before management
• $4,350 − $4,339 = +$11/month
Cashflow with management (5%)
• Management fees 5%: $218/month
• Total expenses with management: $4,557/month
→ Cashflow: $4,350 − $4,557 = −$185/month (negative cashflow)
This triplex generates a slightly positive cashflow (+$11/month) if you self-manage, but becomes negative (−$185/month) with a property manager. The down payment is the key variable.
3. Breakeven by down payment
Here is the impact of the down payment on cashflow for the same $650,000 triplex (4.5% rate, 25 years, 5% management):
| Down payment | Amount | Mortgage/month | Cashflow/month |
|---|---|---|---|
| 20% | $130,000 | $2,876 | −$185 |
| 25% | $162,500 | $2,697 | +$6 |
| 30% | $195,000 | $2,518 | +$185 |
The breakeven point (positive cashflow with management) is around 25% down payment for this triplex. At 30%, cashflow reaches +$185/month, providing a comfortable safety margin.
4. GRM and cap rate
The Gross Revenue Multiplier (GRM) is a quick indicator to evaluate a plex’s profitability:
• GRM = Purchase price ÷ Gross annual income
• Example: $650,000 ÷ $52,200 = 12.5×
• Rule of thumb: GRM < 15× is acceptable, < 12× is excellent
• Cap rate = Net operating income ÷ Purchase price
• Net income: $52,200 − ($6,480 taxes + $3,000 insurance + $6,500 maintenance + $1,566 vacancy) = $34,654
• Cap rate: $34,654 ÷ $650,000 = 5.3%
A 5.3% cap rate is average for Montreal in 2026. To learn more about plex returns, see our guide on plex return on investment in Montreal 2026.
5. Strategies to improve cashflow
Negative cashflow is not inevitable. Here are five concrete strategies to improve your plex’s profitability:
Increase the down payment
Going from 20% to 25% turns negative cashflow into positive. Each additional 5% adds approximately $180/month.
Optimize rents
Check if current rents are at market rate. A legal adjustment at renewal can add $50 to $150/month per unit.
Self-manage the building
Eliminating 5% management fees saves approximately $218/month on a triplex with $4,350 in revenue.
Reduce maintenance through prevention
A preventive maintenance program reduces costly emergency repairs and protects the building’s value.
Negotiate the mortgage rate
A mortgage broker can obtain 0.2 to 0.5% less, representing $50 to $130/month in savings.
For deeper investment strategies, read our complete guide on how to invest in a plex in Montreal 2026.
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