First plex: the 7 leasing mistakes that eat your first-year cashflow

You ran the numbers before buying, they held up, and yet twelve months later the account doesn't balance. It's almost never because of a spectacular surprise. It's the accumulation of seven ordinary leasing mistakes, none of them dramatic on its own.

They share one trait: they all happen in the first six months, and most are irreversible for the current year. A notice missed in February cannot be recovered in June.

Mistake 1 — Not reading the leases before possession

You're not just buying a building: you're buying three contracts you didn't write and can't change unilaterally. In Quebec the lease follows the building: article 1937 of the Civil Code prevents a new owner from terminating an existing lease, and the TAL's guide for buyers notes that a sale does not affect the tenant's right to keep the dwelling on the conditions of their lease. The lease then renews like any other.

To read line by line, before signing at the notary:

• The end date of each lease — it determines your only notice window of the year
• The exact rent and what it includes: heating, hot water, electricity, parking, snow removal
• Special clauses negotiated by the previous owner (pets, subletting, maintenance)
• Each lease's Annex G, which documents the rent history you inherit
• Any deposits or advances, and who they belong to on possession

Mistake 2 — Missing the legal notice window

This is the costliest first-year mistake, and the easiest to avoid. For a lease of 12 months or more, the rent modification notice must be sent between 3 and 6 months before the lease ends. For a lease ending June 30, the window runs from January 1 to March 31.

Outside that window, the lease renews automatically on the same terms for the next period. A notice sent April 15 for a lease ending June 30 has no effect: you've just lost a full year of increase.

Once the notice is received, the tenant has one month to respond — and silence counts as acceptance of the new terms. If they refuse, it is on you to apply to the TAL within the month following that refusal to have the rent fixed: a deadline many new owners let lapse, with the same result as never having sent the notice at all. The exact windows are published by the Administrative Housing Tribunal.

Mistake 3 — Waiting for the unit to be empty before listing it

When a tenant announces their departure, you have several months of notice. Many new owners nonetheless wait for the keys to be handed back before photographing, publishing and showing — turning a cost-free departure into one or two months of vacancy.

On a $1,700 unit, that's $1,850 to $3,700 gone purely because of timing. It's the only lever that removes vacancy instead of shortening it: start early.

Mistake 4 — Choosing a tenant on instinct

'He seemed fine' is not a selection criterion, and this isn't only about financial risk. Selecting without written criteria also exposes you to a discrimination complaint, because you can't demonstrate the objective basis on which you decided.

A usable grid fits in five points, applied identically to every candidate:

1. 1Verified payment capacity, with an effort ratio consistent with the asked rent
2. 2Payment history confirmed with the previous landlord — not only the most recent one
3. 3Identity and employment verification from documented sources
4. 4File consistency: dates, addresses and declared income match
5. 5Complete file submitted within the requested deadline, itself an indicator of seriousness

Mistake 5 — Skipping the move-in inspection

Without a dated, photographed move-in report signed by both parties, you have no reference for establishing what counts as normal wear and what counts as damage at move-out. In practice, that means most damage won't be recoverable.

It takes an hour, while the unit is empty and clean — which is exactly when you're most tempted to skip it because there's 'nothing to note'.

Mistake 6 — Having no reserve for the first major repair

The down payment, notary fees and transfer duties emptied the account. Then the water heater fails in November, or the roof leaks after the first freeze-thaw.

An older plex always holds a surprise within the first twenty-four months. The question isn't whether it will come, but whether you can fund it without touching the rent or delaying a repair that will get worse.

Mistake 7 — Improvising the relationship with inherited tenants

Tenants in place didn't choose to change landlord. The first weeks set the tone for the years that follow, and a damaged relationship is expensive: unreported issues that worsen, systematic refusal of increases, badly prepared departures.

• Introduce yourself in writing on possession day, with your contact details and the rent payment method
• Confirm what isn't changing: the rent, the inclusions, the current lease conditions
• Answer maintenance requests quickly, even if only to say you'll handle it next week
• Document every important exchange in writing — it's your evidence before the TAL the day you need it

What the seven mistakes cost together

Taken separately, none of these lines calls the investment into question. Added up over a first year, they are more than enough to explain the gap between the cashflow projected in the purchase offer and the one in the first income statement.