How it works

Get the best out of your investments in real estate. We’ll show you how.

Your Investment Profile

Approaching real estate as an investor can be highly rewarding when done right. There’s a lot involved from the property itself and its condition, the neighborhood potential, how much you’re willing to put down as down payment, and the mortgage you receive from the bank.

With each property you evaluate, you’re providing the down payment amount, how much revenue its expected to generate (if you were to rent it out) and the number of units/apartments the property has.

In every evaluation, you can adapt your profile to see how you can approach a property of choice to maximize the return on investment.

A great looking property in a less attractive neighborhood can be a bad investment while a rundown property in a more attractive neighborhood can be a much better investment. At the end, what matters is how much you pay for it considering what you can afford to change and maintain, given the potential growth of the area and its demand.

Neighbourhood Potential

We have data from every area in Quebec, Canada (for now). Through in-depth analysis and historical studies we have gathered statistics on the attractiveness of the area (distance to nearby places and pedestrian friendliness) to get you an accurate estimation of three key metrics:

  • How a property’s value will appreciate
  • Its potential vacancy rate
  • How its rent may perform over time

Return on investment

Every investment comes down to the returns it will generate for the investor. As an informed investor, this is the number that matters for every investment. The Return on Investment is the rate at which the investment will grow every year considering all the future cash flows that go into maintaining the property and paying off any mortgage as well the cash flows that you get as revenue from rent.

We use the property evaluation with your investment profile to compare it to an equivalent portfolio in the US Stock Market (S&P index) which we estimated to generate a 6.5% annual return.


While it’s impossible to predict the exact performance over time of any investment, financial experts have been making reliable models to manage their money in a variety of industries. These models rely on assumptions that are determined using statistical studies and historical values from a variety of research and government centers, as well as other market indicators. We use similar techniques to provide you with simple to digest information about any property that many experts, such as agents, insurance companies, and mortgage brokers, use to determine its current and future value.

Appreciation Rate

Smart investors make sure real estate is part of their investment portfolio because properties appreciate in value over time. It’s important to note all the factors that affect the appreciation rate, and we take care of that for you with Worth It Labs. We combine statistical studies and historical values of properties from the FCIQ database with the attractiveness of the area (distance to nearby places and pedestrian friendliness) to get you an accurate estimation of how a property’s value will appreciate.

Vacancy Rate

When you approach a property as an investment, it’s important to note its chances for being rented out, should you choose to not live in it. Each day the property goes unrented will add up over time and affect your property’s profitability. This loss, called the vacancy rate, is calculated as a percentage of the number of days the property has no tenants over the total number of days in a year. Our studies show that the vacancy rate in Quebec varies between 3% and 10%, whereby more attractive areas tend to have lower vacancy rates.

Inflation Rate

The salary of every person involved in the construction of a property and and the price of every single material used in it can have an impact on its value, from the architect drawing blueprints to the copper in the electric cables. To provide you with a holistic, long term understanding of a property’s value, we factor in the inflation rates of trades and materials related to the construction and maintenance of residential buildings, using reliable sources like Statistics Canada and the Government of Canada.

Maintenance Expense

Approaching a property in an attractive area can be extremely profitable regardless of its condition. The more money you put into maintaining property, the higher the property’s value becomes. We provide an estimate number represented as a percentage of the property’s value. It accounts for basic maintenance (everything from changing the burned lamps to repairing broken stoves and getting an exterminator), external & structural (roof, facade, and structural repair), heating and electricity.

Note that maintenance does not include renovations unless they are necessary and not to improve the current state of the property.

Agent's Commission

While the commission on a property sale in Canada, which is around 5% on average, is only paid by the seller, you still need to be aware of this number when purchasing a property as an investment.

Annual Rent Increase

Property rentals tend to increase year by year. And so it’s important to consider the annual rate of rent increase in property investment evaluations as property’s rates can differ from area to area. A property’s rent can increase based on the demand and vacancy rate of its neighborhood.

Note that this assumption also takes into account the legislative limits set by the “Régie du Logement”.

Acquisition cost

There are four main upfront costs associated with the purchase of a property: your down payment, welcome tax, the inspectors, and the notaries.

Down Payment

Naturally this is largest percentage of your acquisition cost, but choosing the right percentage of down payment on a property can dramatically improve your return on investment — and bigger is not always better in this case. In Canada, you will typically have a minimum down payment starting at 5%. For a purchase price of $500,000 or less, the minimum down payment is 5%. When the purchase price is above $500,000, the minimum down payment is 5% for the first $500,000 and 10% for the remaining portion.

Welcome Tax

The second largest amount in the acquisition cost is the Welcome Tax. It is based on the ongoing Canadian rates of the taxe de mutation.

Inspectors & Notaries

Our estimates of the inspectors and notaries expenses represent our opinion of what it should cost to perform a their respective actions. Please note that our opinion is based on close surveys on the average cost related to this action.

A common prepurchase inspection is performed by a qualified and experienced home inspector that will examine the major systems in the property such as:

  • Electrical
  • Roofing
  • Plumbing
  • Heating/Air Conditioning
  • Foundation
  • Septic Systems

Our estimates of the inspectors and notaries expenses represent our opinion of what it should cost to perform a their respective actions. Please note that our opinion is based on close surveys on the average cost related to this action.

On the other hand, your notary will help you with legal papers and protect you during the deal by acting as the bridge between the buyer and the seller of the property. For more information please refer to the following article.

Tip: In general, the inspection and notary cost is not significant enough and should not impact the profitability of your investment. Though it is necessary to avoid hidden problems that might have extreme financial consequences after you make your investment.

Mortgage financing

Our mortgage rates are provided by
All calculated payments are done using the most common method used by bank which consider rates to be nominal rates with bi-annual frequency. Please note that actual payments might slightly defer but should not in any way of for affect the overall evaluation of your investment.

The Mortgage Loan Insurance is required in Quebec whenever your down payment is under 20%. We have calculated the exact price this insurance would cost you if you were to go with CMHC (Canada Mortgage and Housing Corporation) which is the most common one. Note that other insurers like Genworth other offer this insurance so do not hesitate to shop. Please note that our calculation use the ongoing rates of the CMHC

Capital Payment: Note that in every mortgage payment you make, a portion goes to reimburse the capital and the rest is to pay the interest to the bank. With time the proportion of capital paid increases with each payment and the interest decreases.

Capital earned in your real estate investment is considered to be a combination of capital acquired from the capital reimbursement of you mortgage payments and capital gain from the increase of your property value.

Refinance: The eligible amount for refinancing is calculated using the most common factor of 80% of your projected property value (considering all capital gains) from which we subtract the residual amount owed on your mortgage. Please note that some banks might use other ratios and that this does not take your revenue nor credit into account. This can be different in your circumstances.

Budget & Expenses

When you invest in real estate, there’s revenues generated as well expenses needed to maintain the property. As properties tend to be long term investments, it’s critical to know when a property invested in will generate more revenue than expenses so you know at what point it will generate a profit as long as you decide not to sell it. The best investments in real estate are ones that can generate a profit sooner without the need to sell it.

With Worth It Labs, we provide you with a timeline of revenues and expenses so you have a clear idea of when you should plan to spend less than what you make in addition to property’s estimated price in 5, 10 or 15 years.

Here are the components that go into the calculation of the budget:

Ongoing expenses

Municipal Tax: This is our estimate of the costs related to the general municipal property tax, according to the sector. Our estimates are based on studies and surveys done in your area.

School Tax: This is our estimate of the costs related to the general municipal property tax, according to the sector. Our estimates are based on studies and surveys done in your area.

Insurance Premium:

  • What is Property Insurance? Property insurance can protect your property against all types of damage to your home, such as flooding, vandalism and theft. Most lenders require you to insurance your property to get a mortgage so they can protect their invested asset in your property.
  • How we estimate Property Insurance premiums? Our premium estimates are based on averages from surveys and studies that we have conducted on different properties with multiple features.
  • The key drivers of your Property Insurance Premium: The premium you pay is calculated based on the type of coverage you want and several risk factors including:
    • Where you live: More dangerous neighborhoods may be more expensive.
    • How close you are to water: An increased chance of flooding could increase your premiums.
    • Your replacement cost: The more valuable the house and its contents, the more expensive it will be to replace should something happen to it.
    • Your home’s construction: Your insurance company will take into account factors like what type of heating system you have, the age of your roof, and the type of plumbing to assess the chances of making an insurance claim.

Note that you can purchase property insurance from a broker, agent or directly from the Insurance Company. The agent sells only from one insurance company while a broker deal with multiple companies and tries to get you the best deal.