Any Alberta investors own rentals in BC?

[Ken T.]

Hi folks. I'm currently a small time investor in Alberta. I'm ready to buy again and Alberta is a bit scary to me right now. I have some connections in the Okanagan and I'm wondering if there are any Alberta investors that own small multi families in BC? I'd love to hear any of the do's and dont's of out of province investing. Any feedback would be appreciated!

[Brianne H.]

Hi @Ken T.

I'm in the Calgary area, and though I haven't personally invested in BC, my parents own 2 rentals there, and after hearing about some of the nightmares they've been through, I've decided I absolutely will not invest in BC, and here's why:
- All of BC is rent-controlled in how much % you can increase the rent every year. This past year it dropped even more with their NDP government. (4% down to 2.5%)

- Once a tenant is in, you can't simply evict them or non-renew a lease. If they're adamant about staying, once they're in, they're in. Good luck getting them out. When you read through the landlord-tenant act, there are extremely few ways of getting a tenant out. Even if you sell the place and someone else wants to move in, you can't force them to vacate. 

- As you might have guessed by now, the laws are very much in favour of the tenant. 

- If you have an issue with the tenant, you actually can't go to court, you must go through the RTB, and through an arbitration process. The arbitrators tend to also favour tenants, and the burden of proof on the landlord is high. Did I mention that the conference call with the arbitrator isn't allowed to be recorded? 

- All notices must be served exactly the way the law specifies - example rent increases need to be served on the specific form, you can't just give a written notice of rental increase that you draw up yourself. I'm trying to find the article I read some time ago of an older couple who owned a rental property, I think the husband died and the wife (who wasn't as familiar) took over. Had the same tenant for years, had a good relation, served written notice of rent increases over the years without issue. Eventually tenant finds about that rent increases must be served on a specific form, he takes the issue to RTB, and wins, with the ruling being that any rent increases from the time the wife took over (probably about 15 years at this point) were invalid, so the landlord owed the tenant about $24k. 

- Screening tenants is going to be fairly limited - for example did you know you're actually not allowed to take a copy of their driver's license? 

- Beyond the extremely tenant-friendly laws, keep in mind that there are more taxes in BC as well - at closing expect a few thousand dollars more, and now there's this speculation tax - I don't know all the ins and outs about that, but I imagine it may significantly affect investors. 

Clearly I'm pretty biased against investing in BC, but if you do decide to do it, you've been warned :) For me, it's a far greater risk and much more scary for me to invest there than it would be to buy something in AB. Things aren't great here at the moment, and no one really knows where the bottom is, but based on history, prices and economy will come up again, it just might take a few years.