Rental Restrictions & Other Strata Bylaws
Are there rental restrictions? This a very common question asked by buyers looking to either buy in a building that is strictly owner-occupied, looking for flexibility if their situation changes and they need to rent their condo out, or strictly for investment purposes. Now, the quickest answer is that every strata building is different, and looking through and reading the strata documents is key to deciding on whether to purchase the condo or not. You must review the bylaws fully to ensure that they will work for you. Strata bylaws can range from ‘unrestricted’ all the way to limiting your ability to rent out additional bedrooms in your condo.
For this type of condo, there is what we call an “Investor Price Floor” for the ones that are fully rentable. The Investor Price Floor (IPF) is the price that an investor will pay for a condo that will allow that investor to get the desired rate of return on the condo. In simpler terms, it’s the price that an investor is willing to pay, regardless of the condition of the unit/building/area, where it makes sense financially for them to purchase the condo and rent it out for profit.
The Condominium Home Owners Association of BC (CHOA) has a great resource here with more information.
The key consideration when buying a rental condo is knowing your tolerance to flexibility within the building. There are buildings that are zoned for short term rentals, which still require business licensing and other considerations in order to do legal short term rentals. Some buildings will have a minimum rental term (ie rentals must be for a term of at least 1 year), to reduce turnover in the building which typically causes wear and tear. Other buildings will restrict the number of rentals that they will allow at once (ie only 4 units can be rented at one time), to ensure that they still have a high number of owner-occupied condos.
What’s the scoop on 55+ condos? Most condos that are found in 55+ buildings are seemingly discounted to reflect the fact that there is a smaller market that will be able to live in the property. Accordingly, if you ARE 55 or older, this market is fantastic!
There is an abundant selection for these types of buildings around Victoria and the surrounding area. Here are some advantages to a 55+ Building:
1) The owners are generally more involved in strata business, and therefore building upkeep is very good.
2) The age restrictions create a group of owners that have similar interests, increasing the social aspect of a building
3) 55+ Buildings are generally quieter than unrestricted age buildings
4) The price is generally better for the same size/type of condo that is unrestricted, as there are fewer buyers that fit the criteria.
So, if you are over 55 years of age, an age-restricted building can really work in your favour.
Learn More about Pet Bylaws by clicking here.
It is very important when purchasing a condo to review all of the rules and bylaws, and understand how they might apply to you – now, and in the future. Rental restrictions are just one type of bylaw. Other common areas that buyers usually want to know are pet, BBQ & smoking bylaws.
If you are looking to purchase or sell a property in the current market, or in the future, it’s important to have an expert on your side. Get in touch with The Condo Group Real Estate, reimagined as Island Realm Real Estate, Ltd.for more information at 250-382-6636.
Come meet your Condo Experts, and visit our modern new office, designed to enrich your buying and selling experience, located at 102-3645 Tillicum Road, Victoria, BC. In the meantime, search through thousands of listings in the Greater Victoria Area here.
— The Condo Group Real Estate, reimagined as Island Realm Real Estate, Crew