Maxing Rent Increases Every Year: Smart Strategy or False Economy?

Every spring, the same question circulates in investor groups: should you raise rent to the maximum allowed on your North Shore plex, or ease off to keep a good tenant? The 2026 suggestion from the Tribunal administratif du logement (TAT) — 3.1% — revives the debate between maximizing income and avoiding turnover. Our position is not the one you would expect from a buyer of multi-unit properties.

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

🔥 Our take, no hedging

Let's be blunt, even if it's surprising coming from a buyer of multi-unit properties: aiming for the maximum allowed increase every year, on every unit, without thinking, is rarely the best landlord strategy. The question isn't whether you have the right to raise rent — you do, and documenting your costs to justify a fair increase is even essential. The question is whether maximizing at all costs actually makes you richer, once turnover and vacancy are put into the equation.

The posted rent isn't your income. Your income is the rent collected, minus empty units, minus restorations, minus bad debt. A triplex owner who pushes a good payer toward the exit to gain an extra $30 a month may have just traded stable income for two months of vacancy and a renovation bill. It's a classic false economy: optimizing one line of the budget while degrading the net result.

Careful, though: the opposite is also true. Never raising rent, out of fear or discomfort, lets your rent slip below market and below your real costs — taxes, insurance, maintenance, which aren't shy about climbing. The right strategy is neither blind maximizing nor a freeze: it's the fair, documented, calibrated increase on each unit.

The real hidden cost: tenant turnover

Do the math honestly. On a unit renting for $1,200, the 2026 base increase of 3.1% represents about $37 more per month, or roughly $447 over the year. Now imagine that increase — or the accumulation of maximum increases year after year — pushes the tenant to leave. You inherit:

• One to two months of vacancy while re-renting: $1,200 to $2,400 gone in one shot.
• Restoration: paint, floors, cleaning — easily a few hundred to a few thousand dollars.
• Advertising and screening time: listings, viewings, credit and reference checks.
• The next-tenant risk: you know the current payer; the replacement is an unknown.

A single month of vacancy at $1,200 wipes out the equivalent of nearly three years of the annual increase gained on that rent. The official calculation method changes each year — we break it down in our analysis of the new TAT rent calculation method for 2026 — but the amount allowed isn't the point here. The point is the scale you choose to apply, and to whom.

A rental market that is no longer yesterday's

The "the market is so tight they'll never leave" argument held up for a long time. It holds up less well in 2026. Radio-Canada reported in November 2025 that some Montreal landlords now struggle to rent: vacancy exceeds 5% for the priciest units, and some owners now offer one to three months of free rent, furniture or internet to attract tenants. CORPIQ, which defends landlords, has itself noted a slowdown since spring 2025.

In that context, the TAT set the 2026 base increase at 3.1%, calculated on the three-year average of the CPI — well below the 5.9% record of 2025. In other words: the room to maximize is shrinking at the very moment re-renting an empty unit becomes longer and costlier. On the North Shore, where the supply of new units has surged, a tenant pushed out has more options than two years ago — and you have fewer guarantees of replacing them quickly at the target price.

"The TAT suggests a base rate; landlords and tenants remain free to agree on an increase that suits them."
— Tribunal administratif du logement, 2026 rent-setting method

Sources: Protégez-Vous — "The TAT suggests a 3.1% rent increase" (January 20, 2026); TAT — How the rent adjustment is calculated in 2026; Radio-Canada, November 18, 2025.

🎭 The devil's advocate

Let's be honest: the "always maximize" camp has solid arguments, and we need to face them head-on.

First, the ratchet effect. Every year you don't raise to the maximum, the gap with the market compounds and becomes very hard to close — the new TAT method is index-based, with no automatic catch-up. A rent left far below market for ten years can cost you far more than a few avoided move-outs. Your real costs, meanwhile, climb every year: property reassessments on the North Shore, insurance premiums, upkeep of an aging stock. Not indexing means growing poorer in silence.

Second, sentimentality has a price. Many small landlords don't raise rent "because the tenant is nice" — and end up with a money-losing building they subsidize out of their own pocket. A good tenant at a rent well below market isn't a selfless gift: it's a shortfall that drags down your plex's resale value, since a buyer capitalizes real income, not potential income. From that angle, applying the maximum increase isn't greed: it's sound management.

That counter-argument is real. It explains why so many owners end up cornered — a debate we push further in our opinion on housing policy and the small plex landlord.

The verdict

After weighing both camps, here's where we land: raise rent every year, but calibrate the scale — don't confuse "indexing" with "blindly maximizing". The real mistake isn't choosing between maximizing and retaining: it's applying the same reflex to all your units without looking at the one number that matters, the gap between your current rent and actual market rent.

Concretely, for a North Shore plex owner in 2026: always index at least to the level of your costs and the CPI to avoid the ratchet effect; reserve the maximum increase for units clearly below market or for problem tenants; and deliberately protect the good long-term payer with a moderate increase, because their loyalty is worth more than $30 a month. Maximizing on a unit already at the top of the area, in a cooling market, is the perfect false economy. And if your building stays in the red despite tight management, the real question may no longer be the rent, but the building itself — and there, an honest look at your options is in order.

Also in our opinion cluster:

• TAT delays: your plex held hostage by a tenant who has stopped paying
• Renovate before renting, or rent as-is?

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