In 2025, VisionDev analyzed more than 280 buildings across Greater Montreal and submitted close to 80 offers. On our own 11 buildings ($37.5M in assets), we use exactly the method described here: net operating income divided by the cap rate. A half-point difference in cap rate moves the value of a 12-unit building by more than $250,000.
A plex in Montreal is worth, first and foremost, what its rents produce. For a building with 5 units or more, the reference method is the income approach: take gross rent, subtract operating expenses to get net operating income, then divide that net income by the cap rate for the area. Price per door and comparable sales are then used to check the result.
At VisionDev, we run this calculation every week on buildings that owners bring to us, and it is also the basis of our own estimator. Here is how to do it yourself, with the numbers we see on the ground in 2026.
| Method | How it works | When it matters |
|---|---|---|
| Income (cap rate) | Net operating income ÷ cap rate | The baseline for any building with 5+ units; it is what lenders and buyers look at |
| Comparable sales | Recent prices of similar buildings, often expressed per door | A check on the result; dominant for owner-occupied duplexes and triplexes |
| Replacement cost | Land + rebuilding cost, minus depreciation | Rarely useful for an existing plex |
Start from rents actually collected, not "potential" rents. Add ancillary income: parking, laundry, storage. For a 6-unit building renting at an average of $1,250: 6 × $1,250 × 12 = $90,000 per year.
Two traps:
Subtract everything it costs to run the building, excluding the mortgage: municipal and school taxes, insurance, maintenance and repairs, snow removal and landscaping, common-area electricity, heating if paid by the owner, management (count it even if you self-manage, because a buyer will), and a reserve for vacancy and bad debt (2 to 4%).
In Greater Montreal, expenses typically run 30 to 40% of gross income for a plex where tenants pay their own heat, and more when the owner pays it. In our own estimator, we use a 70% net-to-gross ratio, then remove about $1,000 per unit per year when heating is the owner's responsibility.
On our example: $90,000 × 70% = $63,000 of net operating income (NOI).
The capitalization rate (cap rate) is the return a buyer requires on net income. The lower the rate, the higher the value. In 2026, for 5- to 24-unit buildings in Greater Montreal, we see cap rates of roughly 4.25% to 5% depending on the area, the condition of the building and rent levels. Central neighbourhoods and renovated buildings trade at the low end; outlying areas and buildings needing work, at the high end.
Value = NOI ÷ cap rate. On our example:
Three quarters of a point of cap rate makes a $222,000 difference on a 6-unit building. That is why negotiations are often as much about the rate as about the building's numbers.
Divide the value by the number of units. On the example at 4.5%, $1,400,000 ÷ 6 = $233,000 per door. Then compare with recent transactions in your area: if comparable buildings sold between $200,000 and $260,000 per door, your result holds. If it is far off, the rents or the cap rate are usually miscalibrated.
Price per door varies a lot with unit size: a 3½ and a 5½ are not worth the same. It is a benchmark, not a method.
If three of the eight rents are at $950 while the market is at $1,250, a buyer sees $10,800 of additional income to capture over renewals, which is more than $200,000 of value at 5%. That gap is why two buyers can offer very different prices for the same building.
Up: rents close to market, a recent roof, windows and heating system, well-documented leases, units with their own heating, parking, a neighbourhood in demand.
Down: very low rents protected by the TAL, major work ahead, a history of disputes, poor bookkeeping (income cannot be proven), owner-paid central oil or gas heating.
Three options, from simplest to most formal: a direct buyer who gives you a free written analysis, a broker who prepares a comparative market analysis, or a certified appraiser for an official report ($1,500 to $3,500 depending on the building). All three should land close together if your income and expenses are well documented.
VisionDev buys buildings with 8 units or more across Greater Montreal, directly and without commission. If you want to know what your building is worth, request our free preliminary analysis: you get a justified number, with no obligation. Not sure whether to use a broker or sell directly? Read our comparison.
Take the annual gross rent, subtract 30 to 40% for operating expenses to get net operating income, then divide that net income by the cap rate for the area (4.25 to 5% in Greater Montreal in 2026). A 6-unit building with $90,000 in rent is worth roughly $1.26M to $1.48M.
It depends on the neighbourhood, unit size and current rents. For buildings of 5 to 24 units in Greater Montreal, we generally see $150,000 to more than $300,000 per unit. Use it to sanity-check a valuation, not as a valuation method.
No. The assessment roll is set at a reference date that is often several years old, and it exists to calculate property taxes, not to set a sale price. Market value can be well above or below it.
Yes, because value is based on current net income. A buyer will still factor in the upside at lease renewals, especially when the gap with market rent is documented.
No, it is not required. A certified appraisal is mostly demanded by lenders. To set an asking price, a written analysis from a serious buyer or a broker is usually enough.
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