Any Alberta investors own rentals in BC?

Question

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. · Answer

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.

Theresa Harris · Answer

@Jared Whidden Lethbridge prices are pretty stable and have been for the last 10 years. When I was looking in BC (I have 3 rentals there), I also thought of Cranbrook, but ultimately went for Vancouver Island as I have family there (this was just before house prices went crazy). I have one in Lethbridge and have been happy with it. Lethbridge still has lots of new builds, most on the west side.

Theresa Harris · Answer

@Ken T. I am in Alberta and have a rentals in BC. If you haven't bought in BC, as others mentioned rental laws are different than AB. Purchasing is also different as there is a property purchase tax. Housing prices in many parts of BC have gone up a lot in recent years. There are parts of Alberta that aren't as closely tied to oil and gas (Lethbridge).

Zack Kahl · Answer

@Ken T. If you are looking to invest here @Greg Eaton is the man to talk to. Unlike my self he has got it very well figured out haha!

Greg Eaton · Answer

Having been a landlord in Calgary before moving to BC, I am well aware of both landlord/tenant systems. The BC system is clearly in favour of the tenant, but if you are a good honest landlord it will almost never be an issue. I would love to see a more balanced RTB system in BC, but this also ends up being my advantage, because it scared many landlords away, and I know how to work the BC system. Every cloud has a silver lining.

Jason Ridout · Answer

@Brianne H. you are mostly right! Residential landlord laws are pro tenant in BC, learning the rules and knowing how to navigate them is important.If someone buys property that currently has a renter in it, they can kick the tenant out and move in, you just can't kick them out and rent it to someone else.The speculation tax will not effect most investors. It is only for properties that are vacant. If it's rented, you are exempt. It just a tax for people with vacation homes.Yes BC is sort of "rent controlled", but just make sure you keep your rent prices up. You can increase rents according to how much the consumer price went up. If you don't increase rents for 15 years and then try to bump them up 25% it won't work. Just keep upping them 2-3% per year.Places like Cranbrook offer stable house prices and fairly stable vacancy rates. It's up to you what is important. Stability and pro tenant laws, or landlord friendly law and bigger price fluctuations.

Jared Whidden · Answer

All very valid points - thanks for sharing. Their are a few really strong markets in BC for rentals, but as you mentioned definitely more risk then can be found elsewhere.

Jared Whidden · Answer

Please add me to that list as well Greg. I'm in the Corowsnest Pass, but have properties in BC and AZ. I've been looking at Cranbrook as a closer to home option with a fairly diverse economy (Lethbridge, AB is another I'm looking at).thx!

Anthony Therrien-Bernard · Answer

@Brianne H. That sounds like Quebec... same reasons why I won't invest there.

Greg Eaton · Answer

@Zack Kahl I don't feel like I have it all figured out, but I appreciate the compliment. @Ken T. We also have an investor meet-up in Cranbrook every third Tuesday of the month, you should try to make it out. Send me your email address and I'll add you to the list. Otherwise, let me know when you're passing through town!