The short answer: for a first rental in BC, freehold usually carries less hidden risk than strata. A strata unit can look cheaper, but you share the building's repair bills through monthly fees and, when the reserve fund falls short, special levies that can run to five figures per unit. Strata can still work, especially in a newer, well-funded building, but only after you've read the depreciation report and at least two years of minutes. Since 2022, BC stratas can't stop you renting long-term, but they can ban short-term rentals.
Here's the scenario that makes the difference concrete. It's a worked example, not a real listing.
Picture a two-bedroom condo in Kamloops listed at $395,000, tenanted at $1,550 a month, with a $380 monthly strata fee. The gross numbers look reasonable for the price. Then you request the strata documents, and the minutes show the owners are about to vote on a $14,000-per-unit special levy to replace the roof, because the contingency reserve fund can't cover it.
In BC, a special levy is generally owed by whoever owns the unit when the levy resolution passes. If you complete before the vote, it's yours. A $395,000 condo with a $14,000 levy coming is really a $409,000 condo, and a rental that was marginal now loses money for years.
None of that shows up on the listing. All of it shows up in the documents, if you read them.
Corrected 6 October 2026. The first version of this post said many BC stratas have rental-restriction bylaws capping rented units at 25%–30%, and that older bylaws were grandfathered. That was wrong when it was written: every residential rental-restriction bylaw in BC became invalid on 24 November 2022. Only short-term rental limits and 55-plus age restrictions survive. That section is rewritten below. I've also removed an unsourced range for Kamloops strata fees.
What Strata Actually Means in BC
A strata corporation is the legal entity that governs a strata development. When you buy a strata unit, you own your individual strata lot plus an undivided interest in the common property — the lobby, roof, exterior walls, parkade, elevators, shared mechanical systems. The strata corporation manages and maintains the common property on behalf of all owners.
Day-to-day governance is handled by a strata council — elected from among the owners, typically a president, vice-president, secretary, and treasurer. The council makes operational decisions; major decisions, like passing a special levy, require a 3/4 vote of the owners at a general meeting.
Every month, you pay strata fees. On a Kamloops two-bedroom condo they vary widely with building age, amenities, and financial management. Older buildings with more deferred maintenance and less-funded contingency reserves tend to have higher fees — or have low fees and under-maintained systems, which is arguably worse.
The strata fee covers two buckets: the operating fund (day-to-day expenses — common area utilities, landscaping, insurance, management) and the contingency reserve fund (capital expenditures — roof replacement, boiler replacement, elevator modernization, parking lot resurfacing).
How to Read a Depreciation Report
BC law requires stratas with more than 4 strata lots to obtain a depreciation report at least every 5 years. The depreciation report is prepared by a qualified engineer or building inspector and projects the 30-year capital expenditure timeline for the building's major components.
A good depreciation report will tell you:
- The current condition and estimated remaining useful life of every major component (roof, windows, membrane, elevators, mechanical systems)
- The projected replacement cost for each component in future dollars (inflation-adjusted)
- The current balance in the contingency reserve fund
- Three funding scenarios: no additional contributions, a low contribution rate, and a high contribution rate — and what each scenario means for fund adequacy over 30 years
What you're looking for is the gap between the projected expenditure timeline and the current fund balance. If the roof needs replacing in 7 years at a projected cost of $450,000 and the contingency reserve currently holds $85,000, that's a $365,000 gap that will need to come from somewhere — increased monthly contributions, a special levy, or a strata loan.
Two warning signs to look for together: a large projected spend over the next 10 to 15 years against a small reserve balance, and strata fees that haven't risen in years. That combination usually ends in a levy, and it's invisible until you read the report.
Special Levies: The Hidden Liability
A special levy is a one-time charge assessed against all strata lot owners to fund a capital expenditure that the contingency reserve cannot cover. They require a 3/4 vote to pass, but when a building needs its roof replaced and the fund is dry, the 3/4 vote is not difficult to obtain.
The liability question for investors is timing. In BC, the responsibility for a special levy attaches to whoever is the owner at the time the levy is passed by general meeting vote. If the vote has already happened and the levy is outstanding, it typically must be paid by the seller before completion — this is negotiated as part of the contract. But if a levy has been discussed and is pending a vote, you could complete your purchase and then face the levy as the new owner.
This is why reviewing strata minutes — not just the financials — is essential. The minutes of strata council meetings and general meetings will reveal what has been discussed, what votes are upcoming, and what the council knows about the building's condition that isn't yet reflected in a formal notice. Read the last three years of minutes, minimum. If the council has been talking about the roof for 18 months, a levy is not a surprise — it's a scheduled event.
Strata Bylaws and Rental Restrictions: The Investment Killer
Beyond the financial risks, strata bylaws can fundamentally alter whether a condo can function as a rental property at all.
The good news for long-term rentals: since 24 November 2022, no strata corporation in BC is allowed to have a residential rental-restriction bylaw, and every existing one became invalid on that date. Caps on the number of rented units and outright rental bans no longer apply, with no bylaw changes needed by the strata. Age restrictions are still allowed, but only for 55 and over.
What stratas can still do is ban or limit short-term rentals, and many do, so a condo you were hoping to Airbnb may be off the table even before the provincial rules apply. Many also have pet bylaws, noise restrictions, and renovation approval requirements that affect what you can do with the unit. A unit where you want to renovate the kitchen to increase rent may require strata council approval for any work touching common-property walls or plumbing.
For an investor, every bylaw restriction is a potential reduction in the property's income capacity or resale flexibility.
Why Freehold Duplexes Suit a First Rental
Freehold means you own the land and the building outright. There's no strata corporation, no strata council, no monthly strata fee, no depreciation report risk, no special levy, no bylaws about who can rent or what you can do with the property. When the roof needs replacing, you decide when and how, you hire the contractor, and you pay for it — but you're also the only person deciding how much to fund for that eventuality.
The absence of strata politics matters too. With a strata unit you can be outvoted on decisions that affect your asset, from contractors to fee increases. With a freehold duplex, the decisions are yours, and so is the full downside of a bad one.
The other major advantage is adding value. On a freehold duplex you can renovate the units, add parking, improve the landscaping or convert unused space, and keep the full benefit of those improvements. In a strata, any improvement to common property requires strata approval and the benefit is shared across all owners. Improvements to your individual unit help, but you're limited in scope.
Freehold costs more to get into. For a sense of the gap, the Association of Interior REALTORS® put the Kamloops and District benchmarks at $370,000 for a condo and $664,400 for a single-family home in April 2026. AIR doesn't publish a duplex benchmark, so price a duplex off recent sales of similar duplexes. For many first-time investors, the cleaner ownership and control are worth the higher entry price.
When Strata Can Still Make Sense
Strata isn't always wrong for investors. There are situations where it makes sense.
New or newer buildings with full contingency funding. A strata in a 2018-built building with a healthy contingency reserve, recent depreciation report showing adequate funding, and no pending capital expenditures is a fundamentally different risk profile from a 1985-built building with deferred maintenance. If you buy a well-managed newer strata, the risk of surprise levies is significantly lower.
Commercial strata. Commercial strata (retail bays, office units) operates under different dynamics than residential. If you're buying a commercial strata unit as an investment, the analysis is similar but the tenant base and revenue profile are different.
Location premium that doesn't exist in freehold alternatives. Some neighborhoods have no freehold residential options at an investor price point. If the only way to get into a specific high-demand location (close to a hospital, TRU campus, or downtown core) at a workable price is through a strata, the location may outweigh the structural complexity — if and only if the financials are clean.
A simple rule: before you spend an hour on any strata property, ask for the depreciation report, the last two years of minutes and the Form B information certificate. If they aren't available, or the numbers are alarming, move on.
Common Questions
Is strata or freehold better for a rental property in BC?
For a first rental, freehold usually carries less hidden risk, because you control repairs and there are no special levies. Strata can work in a newer, well-funded building, but only after you've read the depreciation report and the minutes.
Can a BC strata stop me from renting out my unit?
Not for long-term rentals. Since 24 November 2022, residential rental-restriction bylaws are invalid in BC. Stratas can still ban or limit short-term rentals.
Who pays a special levy when a strata unit is sold?
Generally the person who owns the unit when the levy resolution passes. That's why the minutes matter: a levy that's discussed but not yet voted on can land on the buyer after completion. Your lawyer and the Form B will show what's been approved.
How often do BC stratas need a depreciation report?
Every five years, for stratas with five or more lots. Since 1 July 2024 they can no longer vote to defer it.
Sources: Province of BC — changes to strata legislation · Province of BC — strata depreciation report requirements · AIR — Kamloops market, April 2026 (5 May 2026)
Written by Jagatjeet, as part of a public BC Interior real estate learning journey. Published 15 May 2026. Updated 7 October 2026. Jagatjeet is working toward a BC real estate licence and is not a licensed realtor. Nothing here is financial, legal or tax advice.