Owning rental properties in BC can be a lucrative investment, but surprise expenses can quickly eat into your profits — especially if you’re not careful with property selection, tenant screening, and preventive maintenance.
In this post, we’ll uncover some hidden costs property owners in Canada should prepare for.
Whether you’re going at it alone or hiring a reputable property management team, you should factor in these unexpected costs of renting out your home — before trying to calculate your ROI.
Landlord Insurance Cost
Landlord insurance in Canada is essential for anyone renting out a property, as standard homeowner’s insurance usually doesn’t cover tenant-occupied homes.
It protects against property damage, liability & injury claims, and loss of rental income if the unit becomes uninhabitable due to a covered event like fire or flood. Some policies also offer optional coverage for legal expenses, contents, or rent default.
You can expect to pay around $900 to $2,000 annually for an average single-family rental, depending on the location, property type, and tenant profile.
Landlord insurance is a relatively small investment to protect a major asset, but one you should factor into your ROI calculations.
Vacancy Expenses
Empty units can significantly impact your bottom line. You’ll be on the hook for all of your regular expenses and mortgage payments with no monthly revenue to cover your books.
That’s why we recommend working with a professional property management firm who offers a guaranteed rents program, or similar assurance if your unit turns over too frequently.
If you’re going at it alone, expect to spend time & money on online advertising, tenant screening, showings, and income verification — all while avoiding the typical red flags we see on applications, year after year.
Learn more: How to Find Good Tenants
Income Taxes
In BC, Canada, landlords have to report their rental income and pay tax on net income, which gets added to your personal income taxes.
Your taxes payable are calculated from gross rent minus your allowable expenses, then get taxed at your own marginal tax rate, provincial and federally.
If you’re in the property management business like us, it gets classified as business income, which is a whole different story.
Allowable expenses include mortgage interest (not principal), property tax, repair and maintenance expenses, property management fees, insurance, depreciation.
We recommend consulting a tax professional like a CPA well before the year ends.
See our blog on Essential Record Keeping for Property Managers to get a head start.
Maintenance (Beyond the Basics)
When you own rental properties, routine repairs are expected — leaky faucets, scuffed walls, the occasional clogged drain. But it’s the big-ticket items that can sneak up on your budget and turn a profitable year into a breakeven one.
Every now and then, major structural issues like roof replacements, plumbing overhauls, appliance replacement, or HVAC repairs can lead to costs that are higher than normal.
- Roof replacement: $5,000–$15,000 every 15–25 years
- Plumbing overhaul: $2,500–$10,000 depending on property size
- HVAC system replacement: $5,000–$12,000 every 10–15 years
- Appliance maintenance/replacement: $2,000–$6,000 if replacing fridge, stove, washer/dryer as a set
- Painting and flooring refresh: $3,000–$10,000 every 5–7 years (more often for furnished or high-turnover units)
And don’t forget the “minor” items that become major when neglected:
- Annual dryer vent cleaning to reduce fire hazards and improve energy efficiency
- Seasonal hedge trimming, gutter clearing, and yard cleanup — necessary for curb appeal and avoiding fines
- Sealing driveways, checking for leaks, pest control, caulking windows, and updating light fixtures — small things that add up quickly when spread across multiple units
To avoid ballooning maintenance expenses or worse — emergency repairs that force tenant displacement, conduct proper preventative maintenance on a routine schedule.
It’s cheaper to clean a furnace filter or reseal a tub than to replace an entire system after years of neglect.
Not sure if you or your tenant is on the hook for maintenance? Check our blog on who is responsible for rental property maintenance.
Emergency Repairs
No matter how well-maintained a property is, urgent fixes (burst pipes, heating failures, pest infestations) demand immediate action and can wipe out your cash flow for the month (or longer).
Most emergencies don’t happen during business hours, either. Expect higher rates for weekend callouts, after-hours work, and rush parts delivery.
Here are some of the most common emergency repairs and their associated costs:
- Burst pipe repair: $500–$2,000 per incident (plus possible water damage remediation)
- Pest extermination: $200–$1,500 annually depending on severity and type (bedbugs and rodents often require multiple treatments)
- Heating system failure: $3,000–$7,000 for full replacement (or $500–$1,500 for urgent repair)
- Water heater failure: $1,000–$2,500 depending on size and installation complexity
- Sewer backup: $2,000–$10,000 including clean-up, restoration, and city inspection
- Electrical hazards (sparking outlets, panel issues): $250–$2,000 or more, depending on urgency and access
Pro tip: Build an emergency repair reserve into your budget — 5%–10% of your annual rental income is a good start. Partnering with reliable local contractors ahead of time can also prevent panic-mode decision-making.
Turnover Costs
Every time a tenant moves out, your property hits “reset” — and that reset comes with a cost.
Even if the tenant leaves the unit in decent condition, you’ll likely face several expenses before it’s ready to show to the next renter.
Here’s a breakdown of common turnover-related costs:
- Deep cleaning: $200–$600 per unit (especially if carpets or appliances need extra attention)
- Repainting: $500–$2,000 depending on square footage and wall condition
- Lock changes or rekeying: $100–$250 for security compliance
- Minor repairs (holes in walls, broken blinds, damaged fixtures): $100–$1,000
- Professional carpet cleaning (if not replaced): $150–$400
- Marketing & leasing fees: Variable — includes photography, listings, and your time (or your property manager’s)
And if you’re managing furnished or short-term rentals, add laundry service, staging touch-ups, and appliance inspections to the list.
Turnover is when the wear and tear becomes most obvious — scuffed baseboards, stained grout, chipped countertops. These might not require immediate repair, but they do affect how quickly your next tenant signs a lease — and at what price.
Legal Fees and Compliance Costs
Staying on the right side of the law as a landlord in Canada involves paperwork, precision, and professional backup — especially when things go sideways.
Whether you’re navigating tenancy disputes, updating leases, or responding to a bylaw infraction, legal and compliance costs are a part of doing business — and they can add up fast if you’re unprepared.
Small mistakes — like using outdated forms or mishandling a security deposit — can lead to big consequences at the Residential Tenancy Branch.
- Tenancy dispute legal advice or representation: $250–$450/hour
- Eviction filing or hearing prep (including notices, documentation, and representation): $500–$2,000+ per case
- Lease review or drafting by a lawyer: $200–$600
- Bylaw or building code violation fines: $150–$10,000 depending on severity and jurisdiction
- Annual business licensing fees (required in some municipalities): $100–$500+
- Mandatory inspections or certifications (fire, electrical, pest, or safety): Varies by region — often $100–$300 each
Smart landlords either stay current on provincial housing laws or partner with a property manager or legal expert who does. Think of it as insurance against future headaches — because it’s a lot cheaper to get it right up front than to pay for damage control later.
Be Prepared for Unexpected Financial Events
Even with careful budgeting, surprises can happen!
That’s why we recommend that you plan well ahead and keep a reserve fund to make sure you’re not caught off guard.
Before you step into the property management or investment property world, make sure you can handle the inevitable financial events that can lower your ROI.
If you decide to hire a property management team to handle the workload for you, expect to pay a management fee between 10% to 12% of the rental revenue in BC, Canada.
Take the Stress Out of Being a Landlord in Kelowna, BC
Managing a rental property in British Columbia comes with no shortage of complications—changing regulations, difficult tenants, maintenance coordination, and more.
At Vantage West Property Management, we take the heavy lifting off your plate so you can enjoy the financial benefits of property ownership without the day-to-day headaches.
Whether you own one property in Kelowna or a portfolio of Okanagan properties, our expert team will help you protect your investments, maximize your rental income, and stay compliant with BC tenancy laws.
Ready for peace of mind? Let’s talk
Let us handle the hassles so you can enjoy the Okanagan lifestyle.
Call us at 250-868-3151 or email rentals@vantagewestrealty.com