Mistake 01: Overestimating projected rental income
This is probably the number one mistake. A new investor looks at a triplex and does the quick math: three units at $1,200/month = $3,600 in revenue. Except that number is almost never accurate. There are vacancy periods, late-paying tenants, units sitting empty during renovations between occupants, and below-market rents protected under existing tenancy regulations.
In 2026, with Québec’s Tribunal administratif du logement (TAL) still tightly governing rent increases, a building with long-term tenants can show rents well below market rates, and you won’t be able to adjust them overnight.
How to avoid it: Always work with actual current revenues, not projected potential. If rents are below market, build a realistic 2–4 year transition plan into your return analysis. Review existing leases before making an offer.
Mistake 02: Overlooking hidden expenses and deferred maintenance
A building that looks good on the surface can hide serious costs: a roof nearing end-of-life, aging plumbing, heating systems that need replacing, moisture issues in the foundation. These things aren’t always visible during a quick showing, and sellers have no incentive to point them out.
Many new investors budget too tight. They account for taxes, insurance, sometimes management fees, but they forget to set aside a reserve for unexpected costs. A rule of thumb most experienced investors use: budget between 5% and 10% of gross annual revenues into a maintenance and repair reserve.
How to avoid it: Always commission a professional inspection by an inspector experienced with income properties. Get an estimate for anticipated work over the next five years and factor those costs into your real net return calculation.
Mistake 03: Confusing paper returns with real cashflow
The capitalization rate (cap rate) is a useful tool, but it’s widely misunderstood. Many buyers see a 6% cap rate and think that’s their actual return. It isn’t. The cap rate doesn’t account for financing, taxes, insurance, property management, maintenance, or unexpected repairs.
What matters day-to-day is the net cashflow after all those expenses. A building with an attractive cap rate can easily generate negative cashflow if financing is heavy or operating costs are underestimated. In 2026, with mortgage rates still relatively elevated, this mistake can make or break a deal.
How to avoid it: Always calculate your real cashflow: net revenues – mortgage payments – all operating costs. If the result is negative or too tight, renegotiate your offer price or walk away.
Mistake 04: Underestimating the complexity of investor financing
Buying a multi-unit property is not the same as buying a primary residence. The financing rules are different, lender requirements are stricter, and available products vary significantly depending on your profile and the number of units in the building. A duplex finances very differently from a 6-unit building.
Many first-time investors discover, after an offer is accepted, that they can’t get the financing they expected, or that the conditions are very different from a standard residential mortgage. The result: cancelled transactions, lost deposits, and sometimes legal disputes.
How to avoid it: Consult a mortgage broker who specializes in investment real estate before making an offer. Get a pre-approval tailored to your investor profile. The financing structure can make all the difference to long-term profitability.
Mistake 05: Buying with your emotions instead of your spreadsheet
Real estate investment can quickly become emotional. You fall for a well-located building, a beautiful facade, a neighbourhood you love. You start rationalizing: “The market will rise,” “I’ll optimize the rents,” “It’s okay if cashflow is tight at first.” That kind of thinking is expensive.
An investment has to work based on current numbers, not future hopes. If you have to convince yourself it’s going to work out, that’s usually a sign it won’t. The best deals are obvious when you look at the data.
How to avoid it: Build a rigorous analysis framework and stick to it. Set your minimum criteria (cashflow, return, down payment) in advance. If a building doesn’t meet them, pass, without exception.
