Maximizing Cash Flow: The Financial Core of Successful Property Ownership
- Feb 20
- 2 min read
Updated: 4 days ago
In the Montreal real estate market, cash flow is no longer a "set-it-and-forget-it" metric. As we move through 2026, property owners are navigating a unique financial environment: municipal taxes are rising by an average of 3.8%, and the Tribunal administratif du logement (TAL) has overhauled how rent increases are calculated.
At Marsik Management, we believe that successful ownership isn't just about collecting rent—it's about aggressive expense management and strategic revenue optimization. Here is how to protect your margins this year.
1. Master the 2026 TAL Rent-Setting Formula
The days of "guessing" your rent increase are over. As of January 1, 2026, the TAL has shifted to a new, simplified calculation method.
The New Baseline: For 2026, the TAL has set a basic adjustment rate of 3.1% (based on a three-year moving average of the Consumer Price Index).
The Cash Flow Lever: You are entitled to increase rent beyond this 3.1% if you factor in your specific increases in municipal taxes, school taxes, and insurance premiums.
Marsik Tip: Many landlords leave money on the table by only applying the baseline. We ensure every dollar of your increased carrying costs is reflected in your lease renewal notices.
2. Mitigating the 2026 Tax Spike
Montreal's new triennial assessment roll (2026–2028) has seen property values jump by an average of 12.2%. While the city uses "étalement" (spreading the tax hit over three years), your tax bill is still likely higher than last year.
The Strategy: Audit your assessment. If your property value increased significantly more than your neighbors' in boroughs like Montréal-Est or Anjou, you have until April 30, 2026, to file a review request.
The Impact: A successful tax appeal directly lowers your operating expenses, instantly boosting your Net Operating Income (NOI).
3. The 5% Capital Expenditure Rule
If you invested in major repairs recently, 2026 offers a clearer path to recovery. The TAL now applies a fixed 5% threshold for major improvements.
Why it matters: This change removes the "negotiation vacuum" that used to exist. It allows you to amortize large investments—like a new roof or window replacements—over a predictable 20-year period.
Cash Flow Strategy: Prioritize repairs that reduce other expenses. For example, replacing old windows not only allows for a 5% rent adjustment but also reduces heating costs (if you pay them), creating a double-win for your cash flow.
4. Reducing "Leaking" Expenses
High turnover and reactive maintenance are the two biggest "cash flow killers" in Montreal.
Tenant Retention: In 2026, the cost of finding a new tenant (cleaning, painting, marketing, and lost rent) averages $2,500–$4,000 per unit. A boutique management approach focused on tenant satisfaction is often cheaper than a rent hike that triggers a move-out.
Preventative Maintenance: By performing seasonal inspections on your "plex" or condo, we catch small leaks before they become $10,000 emergency repairs.
The Bottom Line: ROI is a Choice
In a market where the Bank of Canada has stabilized rates around 2.25%, the real profit is made in the "nitty-gritty" of property operations. Maximizing cash flow requires a partner who understands the difference between a simple rent check and a strategic asset plan.
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