Tenanted Building or Vacant Building: Which Is the Better Buy for a Plex Investor?

Opinion column by the ImmoMulti Team. Facts are sourced; opinions are our own.

"Buy it vacant, that way you set whatever rent you want." You hear that line at every showing. But between buying a tenanted building with below-market rents and buying a vacant one, which is truly the better buy for a plex investor on the North Shore? As a direct buyer of multi-unit properties, we have a stance — and it will annoy both camps.

🔥 The Opinionated Take

Our position: for an investor chasing return, the tenanted building with below-market rents is almost always the better buy — provided you extract the discount that offsets the low rents. The vacant building, by contrast, sells at the seller's "dream price," which bills you upfront for the freedom to re-let at market. Put differently: with the vacant building, you pay full price today for a potential you still have to realize yourself. With the below-market tenanted building, it's the seller who pays you — through the discount — to take on that same catch-up work. Immediate, verifiable income bought at a markdown beats a theoretical potential paid at full price.

The Discount: What You Really Pay

The value of an income property isn't a matter of taste: it flows from its net operating income, capitalized at a cap rate. Below-market rents drag that income down — and so, therefore, does the price. An honest seller of an under-rented building knows this and accepts a discount. That is precisely where the return hides: you buy below "stabilized" value, then slowly bring the rents back toward market.

On the North Shore, where the median plex price in the Laurentians reached $855,000 (+9% year over year) according to APCIQ data for 2026, every point of discount counts. A triplex whose rents lag by $300/month per unit represents nearly $11,000 of missing annual income — a shortfall that, once capitalized, justifies a substantial reduction in the purchase price. The right reflex: coldly quantify current net income and potential net income, then insist the gap show up in the offer.

The Lease Follows the Building: You Inherit the Rents

Here is the legal fact too many buyers forget: in Quebec, selling a building does not end the leases. The new owner is bound by the leases in force, on the same terms, including the rent. You're not just buying bricks: you're buying contracts. This is confirmed by the Administrative Housing Tribunal on lease renewal and rent-fixing.

The consequence cuts both ways. On one hand, a tenanted building gives you income from day one, a verifiable payment history and a tenant already in place. On the other, you can't simply "bump the rents" overnight: increases are governed by the Tribunal's method, whose suggested base rate is 3.1% for 2026, adjusted for taxes, insurance and work, as La Presse reported in January 2026. A tenant can refuse the increase and have their rent fixed. Catch-up therefore plays out over years — not months. That's the price of the discount. We laid out this mechanic in our column on renovating before renting versus renting as-is.

The Vacant Building and Vacancy Risk

The vacant building has one genuine strength: on the first lease, you set rent at market, with no inherited tenant to accommodate (Section F of the lease then anchors that starting rent). On paper, that's freedom. In practice, as long as the units are unrented, the building earns nothing, while the taxes, insurance and mortgage keep running. That cash-flow hole is the real hidden cost of the vacant building.

This risk is muted on the North Shore, where the rental market stays tight: the vacancy rate remains broadly below the roughly 3% balance threshold in Greater Montreal, per data relayed by CORPIQ. Still, CORPIQ itself notes that, with lower immigration and a wave of new units, "apartments are harder to rent" in certain segments. The freedom of the vacant building is therefore never free: it's bought in days of vacancy.

🎭 Devil's Advocate

Let's be honest: the other camp has solid arguments. A vacant building is a blank page — no dubious inherited verbal lease, no defaulting tenant to remove, no poisoned clause, no "surprise" when you read the leases. You choose your tenants, you set rent at market from the start, and you don't face the catch-up ceiling imposed by the Tribunal. For anyone who hates tenant risk and wants a clean starting point, that's defensible.

Better still: a tenanted building with very low rents can be a trap. If the tenant never leaves and refuses every increase, your "discount" never converts into real return — you stay stuck with insufficient income, year after year. The Tribunal strictly frames increases, and nothing guarantees a voluntary departure. In that scenario, the buyer of the vacant building — who paid more but rents at market right away — comes out ahead. This counterargument deserves respect.

The Verdict for a North Shore Plex Owner

Our verdict, after weighing both camps: the below-market tenanted building remains the better buy — but only if the discount is real and you've done your due diligence on the leases. Return is earned at purchase, not at resale: paying below the stabilized value of an already-tenanted building means banking part of your profit upfront. The vacant building, for its part, mainly makes sense when the discount on the tenanted one is thin, when the inherited leases are rotten, or when you plan to renovate heavily anyway.

The real discipline is neither "always tenanted" nor "always vacant," but always run the numbers: read every lease, compare current net income to potential, estimate the catch-up years under the Tribunal's rules, and check that the discount covers that delay. On the North Shore, where entry is expensive and the rental market stays tight, a properly under-rented, well-discounted plex almost always beats the same building sold vacant at full price. And if you're torn between two buildings, the simplest move is to get a cold, numbers-based, no-flattery read — which is exactly what we do.