As we wrote in our first post we want to use this blog to help Surrey landlords.
We want to network with each other and keep each other informed about the serious challenges we face and the opportunities out there.
One of most important aspects of being a successful landlord is having enough cash-flow to cover your costs (and hopefully make some profits).
B.C. Rent Increase Guideline
Unlike Alberta, British Columbia landlords can’t raise the rent as much as we want for our current tenants living in our rental property.
We have to follow a government guideline.
Here are the details according the provincial government website.
Residential tenancy landlords may increase rent annually by a percentage equal to the inflation rate plus two percent without tenants disputing the increase. The total allowable rent increase for each calendar year is available on the Residential Tenancy Branch website in September of the previous year, under the heading “News”.
You have to remember to follow the legal process to inform your tenants about the rent increase.
If the landlord charges an amount in excess of the inflation rate plus two percent, the tenant does not have to pay the excess rent unless the tenant has been served with a Residential Tenancy Branch order allowing the rent increase.
This means you can’t just phone up your tenants and tell them they have to pay more starting next month.
Reasons To Raise the Rent
Being a landlord is a business. Not only are you aiming to make profits, you also don’t want to lose money.
Owning residential properties can lead to a lot of expenses. Some of these can pop up unexpectedly. Such as:
The roof you thought still had a few years left starts to leak. Your tenants make sure you know about it and expect it to be fixed fast.
The furnace goes out in December. You never expected a relatively new furnace would need to be repaired. One of the appliances you supply conks out.
Your repairman says it would be a good idea to buy a new refridgerator instead of fixing the current one.
How Much Can I Raise The Rent?
In 2013 landlords in BC are allowed to raise the rent 3.8 percent with proper notice.
The increase in 2014 is a lot lower.
According to the B.C. Landlords Association landlords can raise the rent 2.2 percent in 2014.
This appears to be very low considering the raising costs landlords are facing.
At least our guideline is set by a formula that is inflation plus 2.0 percent. If the formula was only the inflation rate it would be only 0.2%(!)
This is the situation Ontario landlords face with their 2014 guideline only being 0.8%
To see the BC guidelines over the past decade click here.