Buying multifamily property

General information, not tax or legal advice. Rules and rates change, and every situation is different. Talk to your lawyer and accountant before you act on anything here.

The rules shape the income

Tenancies fall under BC’s Residential Tenancy Act. Rent increases are capped each year and need proper notice, and ending a tenancy for renovation or redevelopment has strict rules. A building with rents well below market won’t catch up quickly.

Financing

CMHC insures mortgages on rental buildings of five or more units, through lenders. Other buyers use banks, credit unions or private lenders. Talk to a lender early.

What I look at

• Rent roll, deposits and tenancy agreements
• Operating costs for at least two years
• Building condition: roof, plumbing, electrical, envelope
• Suites that are legal, and any that aren’t
• Zoning, and whether more density is allowed

Costs to plan for

Property Transfer Tax, including the further 2% on residential value over $3 million unless an exemption applies. Used residential rental property is generally GST-exempt.

Multifamily property in detail

What drives value

• In-place rents against market rents, vacancy and turnover.
• Building age, systems, envelope and parking.
• Financing: many buyers use CMHC-insured mortgages, which reward energy upgrades, affordability and accessibility.

Typical lease structures

• Residential tenancies under the BC Residential Tenancy Act, on fixed terms or month to month.
• Existing tenants’ rent can rise once every 12 months, by no more than the yearly rent increase limit (2.3% in 2026, 2.2% in 2027), with three months’ notice on the approved form.

Due diligence

• Rent roll, every tenancy agreement and the last notice of rent increase for each suite.
• Operating statements, utility bills and any Residential Tenancy Branch disputes.
• Building condition, the envelope, the roof, plumbing and boilers, plus any hazardous materials survey.

BC and Vancouver specifics

• Apartments are assessed as Class 1, residential. See BC Assessment property classes.
• A sale does not end tenancies. The buyer takes over as landlord on the same terms.
• Vancouver has rules on renovations and tenant relocation for some rental buildings, so check before planning work.

Questions to ask

• How far are rents below market, and how fast could that gap close under the cap?
• What capital work is due in the next five years?
• Are there any open tenancy disputes?

Unit mix and turnover

Studios and one-bedrooms tend to attract shorter-term tenants, and larger units attract households who stay longer. If the mix doesn’t fit local demand, turnover rises, and every turnover costs lost rent plus cleaning, repairs and refreshing the suite. Check the mix against the neighbourhood before you buy.

Reading the neighbourhood and the building

• Neighbourhood: is growth heading toward the site? Are jobs rising, and does the area rely on one employer? Look at schools, transit, crime and planned new supply. New buildings can push older ones into decline.
• Age and condition: older buildings often have long-term tenants at below-market rents. Expect issues with windows, mould, lead or asbestos, roofs, seismic, plumbing and dated kitchens and baths. A well-run old building can beat a neglected newer one, so walk it.
• Amenities add rent but also cost. Make sure they suit the renters.
• Other income from laundry, parking and storage belongs in the net operating income. Mortgage payments and income tax don’t.

Buy on actual numbers

Marketing packages often mix actual income with projected income. Projections show what the building could earn; the price should rest on what it does earn. Ask for the current rent roll, the last 12 months of income and expenses month by month, and the last full year’s statements, then build your own numbers from those.

Add the lines a seller often leaves out: a vacancy and bad-debt allowance even when the building is full, a management fee even if the owner manages it, and a reserve for roofs, boilers, windows and other big items that wear out.

Check that the rent is actually collected

A full rent roll doesn’t prove every tenant pays. Compare each month’s rent roll with the income actually deposited that month. Gaps show who pays late or not at all, and a building with weak tenants costs time and money to re-tenant. If the property is professionally managed, ask for the aged receivables report too.

Questions people ask

Is GST charged on an apartment building?

A used residential rental building is generally exempt. New or substantially renovated buildings can be different. Ask your accountant.

Can I raise rents after I buy?

Only within the annual limit and with proper notice, under the Residential Tenancy Act.