The short answer: yes, usually — but for different reasons than in 2023, and you need to check three things that changed. Suites are now permitted in most residential zones province-wide, so zoning is rarely the blocker it used to be. The provincial Secondary Suite Incentive Program (the $40,000 forgivable loan) stopped accepting applications in March 2025 — plenty of budgets still have it in them, wrongly. In its place there's a federal option, the Canada Secondary Suite Loan Program: up to $80,000 at 2% over 15 years, but it requires you (or a close relative) to live in one of the units, so it's a mortgage-helper tool, not a pure-investor tool. Rent growth on a sitting tenant is capped at 2.3% for 2026. Run the arithmetic on your own quotes before you fall in love with the idea. Not financial or legal advice — confirm current rules with your city, a broker, and BC Housing.
Every second conversation I have with someone starting out in BC Interior real estate lands on the same idea: buy the house, put a suite in the basement, let the tenant carry most of the mortgage. It's the most common entry strategy in the province for good reason — it's the cheapest way to turn one property into two income streams without buying a second property.
What's changed is that the rules around it moved substantially between 2023 and 2026, mostly in ways that are good for you, and one way that is not. Here's how I'd underwrite one today.
What changed, in order of how much it matters
1. Zoning mostly stopped being the problem. Provincial legislation now requires municipalities across BC to permit secondary suites and accessory dwelling units in most residential zones, and larger municipalities to allow small-scale multi-unit housing on many single-family lots. In practice this means the question shifted from "am I allowed?" to "what will the building department require?" — and the second question is a cost question, not a permission question. That's a real improvement. It doesn't mean anything goes: your specific lot, servicing, and parking still govern, so the first call is still to your city's planning counter.
2. The provincial $40,000 forgivable loan is closed. The Secondary Suite Incentive Program — up to 50% of renovation costs to a maximum of $40,000, forgiven at 20% a year — stopped accepting applications on 30 March 2025. I still see it in spreadsheets and hear it in conversation as though it's live. If you built your numbers around it, rebuild them. This is the single most common stale assumption in suite planning right now.
3. There's a federal loan in its place, with a catch. The Canada Secondary Suite Loan Program, administered through CMHC, offers up to $80,000 at a fixed 2% over 15 years to add a self-contained unit. Two percent money in 2026 is genuinely cheap — cheaper than almost anything else you can borrow. The catch that rules out a lot of investors: you must already own the home and live in one of the units (or have a close relative living there). It's built for the owner-occupier adding a mortgage helper, not for the investor adding a suite to a rental they don't live in.
Related and worth knowing even if the loan doesn't fit: since January 2025, insured-mortgage refinancing to fund suite construction allows refinancing up to 90% of the home's post-renovation value (to a $2 million limit) with amortisation up to 30 years. For an owner-occupier, that's often the bigger lever than the loan itself.
4. Rent increases on a sitting tenant are capped at 2.3% for 2026. The annual cap applies to most residential tenancies, suites included. Two consequences for underwriting: don't model 5% annual rent growth on an existing tenancy, and get the initial rent right, because that's the number you'll be living with — the cap resets to market only on turnover, and a tenant who stays six years is otherwise a gift.
5. You can't rescue the numbers with Airbnb. Under the provincial short-term rental rules, short-term rentals in regulated communities are limited to the host's principal residence plus, optionally, one secondary suite or accessory unit on the same property. A suite in a property you don't live in doesn't qualify. If a deal only works on nightly-rate assumptions, it doesn't work.
The arithmetic
Here's the frame I use. The numbers below are illustrative placeholders — substitute your own quotes and local rents, because the whole exercise is worthless with someone else's inputs. For actual BC Interior rent research, my rental market research post covers where I get the numbers.
Assume: all-in build cost $75,000 (permits, design, framing, plumbing, electrical, egress, finishes, and a 15% contingency). Suite rents for $1,500/month. Incremental operating cost of the suite — added utilities, insurance, maintenance reserve, and a vacancy allowance — call it $300/month.
Unlevered return on the build:
- Gross rent: $1,500 × 12 = $18,000/year
- Less incremental costs: $300 × 12 = $3,600/year
- Net operating income from the suite: $14,400/year
- Return on cost: $14,400 ÷ $75,000 = 19.2%
That's the number that makes suites so popular. You won't find a cap rate like that buying a whole building — because you're not buying an asset at market price, you're manufacturing one at cost.
Levered, using the federal 2% loan for the full $75,000:
- Loan payment (2%, 15-year amortisation): roughly $483/month
- Cash flow: $1,500 − $483 − $300 = about $717/month positive
Roughly $8,600 a year in cash flow on nothing out of pocket, while the loan principal is paid down by a tenant. That's the honest reason this strategy dominates in BC, and why I'd rather see a new investor do this well than chase a marginal duplex.
Then the part everyone forgets: the suite also changes what the property is worth and what a lender will do with it. Most lenders will use only a portion of suite income when you qualify — the range varies by lender and whether the suite is legal and permitted — and an unpermitted suite may be treated as worth nothing at all for both appraisal and qualifying purposes. That gap between "generates rent" and "counts as income" is decided by whether you did it legally. It's the strongest financial argument for permits, quite separate from the risk of an order to remove the unit. If you're not clear on how lenders treat this, mortgage pre-approval for BC investors and the stress test post are the background.
The four things that blow the budget up
Almost every suite project that goes badly over goes over on one of these. Get quotes on all four before you commit to a purchase price:
Egress and windows. Bedrooms need compliant egress. In a basement that often means cutting a window well into concrete — excavation, structural lintel, drainage. Straightforward work, easily five figures, and routinely missing from optimistic estimates.
Ceiling height. Older BC Interior housing stock has basements that don't meet minimum height. If the fix is lowering the floor, you're into underpinning territory and the project economics usually collapse. Measure before you offer. This is the one that kills deals outright.
Fire separation and sound. Separation between units, protected exits, interconnected alarms. Predictable and quotable, but it means opening ceilings you may have hoped to leave alone.
Parking and servicing. Your city may require an additional parking space, and older properties sometimes need an electrical service upgrade or separate metering to carry a second kitchen. Both are municipal-specific and both are why the planning counter is the first call, not the last.
Add a contingency on top — 15% is my floor for anything opening walls in a house built before 1990.
When a suite doesn't pay
Being honest about the cases where I'd walk:
- Strata property. Bylaws typically prohibit it outright, and you don't get to out-argue a bylaw. Strata vs freehold for BC investors covers the wider version of this.
- Ceiling height that requires underpinning. As above.
- When the rent doesn't clear the cost. In smaller markets the build cost is similar to Kamloops but the achievable rent isn't. Run it town by town — this is exactly the trap I described in comparing Kamloops and Merritt.
- When you need the money back soon. Suite capital is illiquid. You get it back as monthly cash flow and as value on sale, not on demand.
- When you don't want to be a landlord to someone sharing your walls. Not a spreadsheet objection, but a real one, and worth admitting before you spend $75,000 discovering it.
How I'd sequence it
- Measure the basement. Ceiling height and window locations, before anything else. Ten minutes, and it eliminates the unworkable properties fastest.
- Call the city's planning counter. Confirm what's permitted on that specific lot, plus parking and servicing requirements. Free.
- Get three real quotes on the full scope, not a per-square-foot guess. Contractors will tell you which of the four budget-killers apply.
- Get the rent number from actual comparables — current listings for suites in that neighbourhood, not the city average.
- Run the two calculations above with your numbers, on the pessimistic end of every assumption.
- Talk to a broker before you offer, so you know how the suite income will be treated for qualifying and what the financing path is.
Then decide. If it works on conservative inputs with a real contingency, a suite is still the strongest single value-add available to a small BC Interior investor in 2026 — cheap federal money for owner-occupiers, suites permitted almost everywhere, and rents that support the build. It's just no longer the version of the deal that had $40,000 of provincial money in it, and pretending otherwise is how projects run out of budget at drywall.
For the underwriting framework this sits inside, cap rate vs cash-on-cash explains which return figure to trust, monthly costs on a BC Interior rental is the operating-expense reality check, and underwriting a Kamloops duplex is me working through a real one line by line.