Renting out your condo, house or basement in Ontario: the landlord guide for 2026

Renting out a home in the GTA can pay your mortgage, but one bad tenant or one illegal clause can cost you a year of rent. Here is how to do it right.

Set the right rent

Start with real leased rents, not asking rents. In Q2 2026 the average GTA one-bedroom condo leased for $2,273 and a two-bedroom for $3,013 (TRREB). See average rent by city. Overpricing by $200 can leave a unit empty for a month, which costs more than the higher rent earns in a year.

Screen tenants properly

• Full credit report, employment letter and recent pay stubs, and a previous landlord reference.
• Verify identity in person, and call the employer and landlord yourself.
• Apply the same criteria to every applicant. Ontario's Human Rights Code bans discrimination in housing on protected grounds.
• Never accept "first and last" in cash without a receipt, and never hand over keys before the deposit clears.

Lease and deposits

• Most private landlords must use Ontario's standard lease, and give the tenant a copy within 21 days of signing.
• A rent deposit is limited by law and cannot be used as a damage deposit. Damage and pet deposits are not allowed.
• Clauses banning pets, guests or roommates are void, even if the tenant signs them.
• Put utilities, parking, snow removal and lawn care in writing in the lease.

Rent increases in 2027

For 2027 the guideline is 1.9%. You can raise rent once every 12 months with at least 90 days' written notice on the Landlord and Tenant Board form. Units first occupied for residential use after November 15, 2018, including most new basement units, are exempt from the guideline, but the 12-month and notice rules still apply.

Ending a tenancy

Only the Landlord and Tenant Board can evict. You need the right notice form and a valid reason. If you or a family member are moving in, you owe the tenant one month's rent as compensation (or another acceptable unit), unless you gave at least 120 days' notice. Bad-faith evictions can cost up to 12 months' rent plus moving costs, and fines under the Act go up to $100,000 for an individual.

Taxes and insurance

• Report rental income to the CRA. You can deduct expenses like mortgage interest, property tax, insurance and repairs.
• Long-term residential rent does not charge HST.
• Tell your insurer. A homeowner policy may not cover a rented home or unit; you usually need landlord or rental coverage.
• Renting a basement? Make sure it is legal. See the legal basement guide.

Rent it out or sell?

If the rent does not cover your carrying costs, or you are tired of being a landlord, compare it with selling. With prices down 2.7% from last year and rates rising, the right answer depends on your numbers. I can run both for you.

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