Learning Centre

Think strategically when setting your residential rents

While the allowable increase for residential rents is set every year by the Residential Tenancy Branch, there are other things to think about when considering an increase.


The allowable increase for a residential tenancy is set every year by the Residential Tenancy Branch – a division of the Provincial Government. The allowable increase is based on a formula that was set by the government and the formula is CPI Index (Consumer Price Index) plus 2%. For 2017, the allowable increase is 3.7%.

In order for a notice to be valid, it must be delivered on the standard industry form and it must be given no less than 3 calendar months in advance.

Before giving an increase to a tenant the landlord should consider the following:

  1. Are the current rents at or below market rates?
  2. Is the tenant a good, clean long-term tenant that looks after the premises?
  3. What is the condition of the premises?
  4. If the tenant left, how much cash would you need to inject to re-rent the premises?
  5. If the tenant left, what can you realistically rent the premises for?

Your property manager can advise you on the best strategy to take. If your goal is to sell the property within the next five years, your strategy should be to maximize revenues and minimize costs as the ultimate value of your property will be based on the net cash flow of the investment.

If your goal is to keep the property as a long term investment, you should still keep the rents at or close to market but you might also want to consider the cost of vacancies and the advantage of having good quality tenants in your building who will look after it. As a landlord, don’t buy into the fallacy that you will lose tenants every time you give a rent increase.

Lastly, the allowable increase does NOT apply to vacant units. If a landlord has a vacant unit, you can set the rent to whatever the market can bear. Good old fashioned supply and demand.

This audio recording was created in October 2013; the transcript has been updated to reflect practices in 2017.

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