Buying an apartment building in BC: what owners need to know

Updated September 2026 · General information, not legal or tax advice

What you are buying

A purpose-built rental building of five or more units is usually a single title with many tenancies, not a group of strata units. Five units is also the threshold lenders and insurers use: CMHC's MLI Select multi-unit insurance starts at five units (CMHC). BC Assessment values rental apartments of four or more units (three or more in Vancouver) as a separate property type using the income approach (BC Assessment, Rental Apartment Properties Policy).

In practice you are buying three things at once: a building whose systems and envelope have a remaining life, a set of existing tenancies governed by the Residential Tenancy Act (RTA), and an income stream whose growth is capped by law. Price all three.

Residential Tenancy Act basics for owners

Rent increases

• 2026 limit: the maximum annual increase for residential tenancies in 2026 is 2.3% (it was 3% in 2025) (Province of BC, rent increases).
• Frequency: rent can be raised only once every 12 months, counted from when the rent was set or last lawfully increased.
• Notice: three full months' written notice on the Notice of Rent Increase form (RTB-7), stating the dollar amount and effective date.
• Additional increases: a landlord can apply to the Residential Tenancy Branch (RTB) for more than the annual limit for eligible capital expenditures on major systems or components, incurred within 18 months before applying and not expected to recur for at least five years (Province of BC). The RTB's information sheet says costs are amortized over 10 years and the increase is capped at 3% per phase on top of the annual increase (RTB-151). Applications can also be made for unforeseeable financing costs of purchasing the property, or significant rises in utilities or property taxes included in rent.

Because in-place rents can only rise by the annual limit, a building where rents are well below market will stay below market for as long as those tenants stay. Underwrite on in-place rent, not on the rent a vacant suite would fetch.

Tenancies transfer with the sale

The province is direct: "Once a property is sold, the buyer becomes the new landlord and tenancies continue under the same terms" (Province of BC, sell a rental property). The buyer may also become responsible for security and pet damage deposits the seller collected, so the contract should credit those deposits to the buyer on closing. Showing occupied suites to buyers requires written notice to the tenant or the tenant's permission.

Buying to occupy is not available in larger buildings

The 2024 amendments (Bill 14, the Tenancy Statutes Amendment Act, 2024) bar ending a tenancy for the landlord's or a purchaser's own use in buildings with five or more rental units that are not stratified or are all owned by one person, unless the regulations provide otherwise (BCREA Legally Speaking #574; Province of BC, types of evictions). A buyer of a typical apartment building should assume the existing tenancies stay.

Ending tenancies for renovation or demolition

Many apartment purchases are underwritten on renovating suites over time. BC law makes vacating occupied suites for renovation a formal process:

• Renovations need an RTB orderSince July 1, 2021, a landlord cannot simply serve notice for renovations. The landlord must get all necessary permits and apply to the RTB for an order of possession, and an arbitrator decides whether ending the tenancy is the only reasonable way to do the work (RTB-150).
• Notice and compensationIf approved, the order gives four months, and the tenant receives compensation equal to one month's rent (Province of BC).
• Right of first refusalIn buildings with five or more rental units, tenants can choose to return after the renovation, and the landlord must give a 45-day notice of availability before the work is complete.
• Demolition or conversionA landlord with all required permits and approvals may give four months' notice to demolish, convert to strata or co-op, or change to a non-residential use, with one month's rent as compensation.
• 2024 changesBCREA summarizes Bill 14 (Royal Assent May 16, 2024) as extending the tenant's dispute period from 15 to 30 days unless another period is prescribed, raising compensation to the greater of one month's rent or a prescribed amount, raising the penalty for not using the unit as stated to the greater of 12 months' rent or a prescribed amount, and requiring certain notices to be generated through a government website (BCREA #574).

Financing: CMHC MLI Select and conventional loans

Most 5+ unit purchases use either a conventional commercial mortgage or a CMHC-insured loan through an approved lender. CMHC's MLI Select gives better terms in exchange for commitments on affordability, energy efficiency or accessibility, scored on points. For existing properties (CMHC MLI Select, October 2025):

The minimum debt coverage ratio for standard rental is 1.10. Affordability commitments on existing buildings apply to a larger share of units than on new construction, and they limit future rents on those units, so model them carefully. See the commercial financing guide for conventional lending and documents.

Valuation: price per door, cap rates and vacancy

Apartment buildings are priced on net operating income and cap rate, cross-checked against price per suite ("per door"). Per-door figures are rough because they ignore suite size, age, condition, rent levels and land value.

Source: Goodman Commercial, Apartment Building Sales, Metro Vancouver, January 1 – December 31, 2025. The Eastside average includes several new-construction and mixed-use sales. RENX, reporting Goodman's year-end review, noted 2025 Metro Vancouver apartment dollar volume of $1.3 billion, down 28% from 2024 (RENX).

Cap rates. CBRE's Q2 2026 survey puts Vancouver low-rise apartments at 3.50% to 4.75% (Class A) and 3.75% to 4.75% (Class B), and Victoria low-rise at 4.50% to 5.00% (Class A) and 4.25% to 5.00% (Class B) (CBRE Canadian Cap Rates Q2 2026). No named 2026 survey for Okanagan or Kamloops apartment cap rates could be verified; in those markets, recent local sales are the better guide.

Vacancy. CMHC's October 2025 survey showed purpose-built rental vacancy rising to 3.7% in Greater Vancouver and 3.3% in Greater Victoria (Province of BC, on CMHC), 6.9% in Kelowna, up from 3.9% (Castanet), and 1.2% in Kamloops, down from 1.4% (Castanet Kamloops). Use a vacancy allowance that fits the local market, not a province-wide figure.

BC Assessment. Rental apartments are assessed with capitalized net operating income, using typical rents, vacancy, expenses and cap rates reviewed each year (BC Assessment). The assessed value is a useful cross-check, but it is a mass-appraisal estimate, not a price. For how income properties are valued, see commercial property valuation.

Building condition, rental zoning and operating costs

Condition items to investigate

• Building envelope: roof, windows, cladding, balconies and signs of water ingress. Envelope repairs on an occupied building are expensive and disruptive.
• Plumbing: supply and drain piping material and age. Polybutylene (poly-B) supply piping was installed in Canadian buildings mainly between 1978 and 1997, and insurers may add surcharges, require replacement or restrict water-damage coverage when it is present (Westland Insurance).
• Electrical: service capacity, panels and wiring, especially if you plan to add in-suite laundry or heat pumps.
• Heating and hot water: boiler age and efficiency, which drive both capital planning and utility costs.
• Fire and life safety: alarms, sprinklers where present, and outstanding fire inspection orders.

A building condition assessment from a qualified consultant turns these into a capital plan with costs and timing. Check whether any work would qualify for an additional rent increase for capital expenditures.

Rental-only zoning

Since 2018, BC local governments can zone land for residential rental tenure, requiring that all or a set share of the housing units in a zone be rental (Province of BC, Residential Rental Tenure Zoning bulletin). Check whether the property is subject to rental-only zoning or a housing agreement, because it limits a future strata exit and can affect value.

Operating cost items

• Property taxes and utilities not paid by tenants (water, sewer, garbage, common-area power, gas for central heat and hot water)
• Insurance, which can rise sharply for older buildings or poly-B plumbing
• Repairs and maintenance, suite turnover and appliance replacement
• Property management fees and resident manager or caretaker wages
• Elevator, fire system and other service contracts
• A replacement reserve for roofs, boilers and envelope work

Rebuild the seller's statements line by line, and add costs a seller who self-manages may not show, such as management fees.

How Commercial Real Estate Group can help

Sean Phillips, REALTOR® with Coldwell Banker Executives Realty, works with buyers and sellers of multi-family rental buildings across British Columbia, including rent roll review and coordinating due diligence. To discuss a building, book a free 10-minute Zoom intro or see buying commercial property. Paid advisory is quoted per property. Legal questions about tenancies should go to a BC lawyer, and lending values come from an accredited appraiser.