What Are the Steps to Renting Out My Property? 2026 Toronto Guide

Steps to renting out a property in Toronto 2026 guide

TL;DR — Key Points

  • Pick your lane first: long-term (a lease), mid-term (28+ nights) or short-term (under 28 nights). The rules, taxes and paperwork are different for each.
  • In Toronto, a short-term rental must be your principal residence, registered with the City for $390 a year, and capped at 180 nights a year for the whole unit.
  • For a long-term tenancy, use the Ontario Standard Form of Lease. You can collect only a last month’s rent deposit plus a key deposit at actual replacement cost — no damage or pet deposits.
  • Screen legally: income, rental history, references and a credit check with consent. Do not screen on Human Rights Code grounds.
  • Price from the market, not a guess: Toronto’s average asking rent was $2,554 in September 2026. The 2026 rent guideline is 2.1% for most sitting tenants.
  • Declare every year for Toronto’s Vacant Home Tax (3% of assessed value if vacant) — the deadline is April 30 for the year before.

Table of Contents

Renting out a property in Toronto is not hard, but doing it in the wrong order is expensive. Owners who list first and check the rules later run into condo bans, illegal deposits, unregistered short-term rentals and leases the Landlord and Tenant Board (LTB) will not enforce as written. Follow the steps below in order and you will be compliant from day one.

Step 1: Choose how you will rent it

There are three lanes, and you need to pick one before you do anything else:

  • Long-term rental: a tenancy under the Ontario Residential Tenancies Act (RTA), usually a 12-month lease that then runs month to month. Most control, most tenant protection, steadiest income.
  • Mid-term rental: furnished stays of 28 nights or more. In Toronto this sits outside the short-term rental bylaw, so it is the usual overflow lane for furnished condo owners. See our guide to mid-term rentals in Toronto.
  • Short-term rental: stays of under 28 consecutive nights, for example on Airbnb. Highest nightly rate, highest work, and in Toronto the tightest rules. See what a short-term rental is in Toronto before you assume this lane is open to you.

Do not mix lanes casually. A unit set up as a long-term rental cannot simply take weekend Airbnb bookings in Toronto unless it is also your principal residence and registered — see Step 2.

Step 2: Check the property can legally be rented that way

For a long-term rental, check:

  • Your condo corporation’s rules — many Toronto condos set a minimum lease term, require the lease to be registered with the corporation, and ban short-term rentals outright. The condo board is a second gate on top of city rules.
  • Mortgage and insurance conditions — tell your lender and insurer the unit will be tenanted, and get proper landlord insurance.
  • Toronto’s Vacant Home Tax — a home left empty for six months or more in a year is taxed at 3% of its assessed value. Every owner must declare by April 30 each year, even if the home is occupied. Read the Vacant Home Tax guide.

For a short-term rental in Toronto, all of these must be true:

  • The unit is your principal residence — the one home you live in and use for bills, ID, taxes and insurance. An investment condo you do not live in does not qualify.
  • You register with the City and pay $390 a year, and you put the registration number on every listing. Platforms must verify it.
  • You rent the whole unit for no more than 180 nights a calendar year. Renting up to three bedrooms while you stay in the home has no night cap.
  • Your condo board allows it. City registration does not override a condo ban. Fines for breaking the bylaw range from $1,000 to $100,000.

If any one of those fails, use the long-term or mid-term lane instead.

Step 3: Price it from real market data

Start with comparable listings, not what you need to cover your mortgage.

  • Long-term: Toronto’s average asking rent was $2,554 in September 2026, down 1.4% from a year earlier and the lowest September level in five years, according to Rentals.ca and Urbanation. Family-size units have held up better than small investor condos. Price within about 10–15% of similar units in the same building or street, then adjust on enquiry volume in the first week.
  • Short-term: current Toronto data puts a typical listing at about a $165 average daily rate and 43.6% occupancy, or roughly $1,467 a month on average, with a median closer to $1,765. Remember the 180-night cap when you annualise those numbers.
  • The guideline is not a starting rent. Ontario’s 2026 rent increase guideline is 2.1%. It limits how much you can raise rent for a sitting tenant in a rent-controlled unit (most units first occupied on or before November 15, 2018), with Form N1 and at least 90 days’ notice, and at least 12 months between increases. It does not set what you can ask a new tenant. Units first occupied after November 15, 2018 are exempt from the guideline cap, but the notice rules still apply.

Step 4: Prepare the unit and safety items

  • Fix anything broken before photos, not after complaints. Under RTA section 20 a landlord must keep the unit in good repair and fit for habitation, even if the tenant knew about a problem when they signed.
  • Test smoke alarms on every storey and outside sleeping areas, and carbon monoxide alarms where required. Replace alarms at the end of their service life.
  • Deep clean, photograph every room in daylight, and keep the dated photos — they are your move-in record.
  • For a furnished mid-term or short-term unit, budget honestly for furnishing, linens, restocking and turnover cleaning, and price them into the rate.
  • Book the condo elevator and loading dock for move-in day if your building requires it.

For what ongoing upkeep actually involves, see how to handle maintenance and repairs.

Step 5: List it and screen applicants legally

Write a clear listing: real photos, floor plan or square footage, what utilities are included, parking, laundry, and the earliest move-in date. Then screen every applicant the same way.

In Ontario you may ask for:

  • Income information
  • Credit references and rental history
  • A credit check — only with the applicant’s written consent
  • Employment confirmation and a guarantor, where needed

Use income together with credit and rental history. Do not reject someone on a rent-to-income ratio alone, and do not screen on Human Rights Code grounds such as race, place of origin, creed, sex, family status, disability or receipt of public assistance. A lack of Canadian credit or rental history is not the same as bad history — consider the whole file.

For short-term guests, the platform handles identity and payment, but you still set house rules, a minimum stay and clear check-in instructions.

Step 6: Sign the right lease and take only legal deposits

For a long-term tenancy you must use the Ontario Standard Form of Lease for most private tenancies. Any extra clause that conflicts with the RTA is void, even if both sides sign it — that includes no-pet clauses and extra deposit clauses.

At signing, Ontario allows only:

  • First month’s rent (rent, not a deposit)
  • A last month’s rent deposit, equal to one rental period, to be applied only to the last month — never to damage or cleaning. It earns interest each year at the guideline rate, 2.1% for 2026.
  • A refundable key deposit equal only to the actual cost of replacing the key or fob.

Damage deposits, pet deposits, cleaning deposits and requiring post-dated cheques are illegal in Ontario. A tenant who paid one can apply to the LTB to get it back, so do not take the risk to your credibility for a deposit you cannot keep.

For short-term stays there is no lease — there is a platform booking, your City registration, and your house rules. Put the registration number in the listing.

Step 7: Set up taxes and registrations

  • Short-term: Toronto’s Municipal Accommodation Tax is 6% on stays under 28 nights since August 1, 2026 (it was 8.5% from June 2025 to July 2026), plus 13% HST on the MAT-inclusive subtotal. Platforms collect and remit for platform bookings; direct bookings are your job, filed quarterly. See the Ontario Airbnb tax guide.
  • Airbnb pricing: since September 15, 2026 most hosts are on a single 15.5% host-only fee, taken from the payout on the nightly rate plus cleaning and other host fees. If you want the same payout as before, set the price as your target divided by 0.845 — hosts who did not reprice took an automatic cut.
  • All lanes: rental income is taxable, platforms report host earnings, and non-compliant short-term rental periods can lose expense deductions under the Income Tax Act. Keep receipts, invoices and payout reports from day one.
  • Vacant Home Tax: calendar the April 30 declaration every year. No declaration means the City treats the home as vacant.

Step 8: Move-in day — inspection, keys and records

  • Walk the unit with the tenant, note the condition room by room, sign and date it together, and share the photos.
  • Hand over all keys and fobs, record how many, and collect only the legal key deposit from Step 6.
  • Give the tenant your contact for emergencies, the condo rules that affect them, garbage and recycling days, and how to reach you for repairs.
  • For a first guest instead of a tenant: test the lock code, Wi-Fi, heat and hot water yourself before check-in, and leave the Wi-Fi and checkout details in the unit, not just in a message thread.

Step 9: Manage it properly after move-in

  • Rent increases: once every 12 months, Form N1, at least 90 days ahead, 2.1% for 2026 in a guideline-covered unit.
  • Repairs and entry: fix vital services fast, and give 24 hours’ written notice to enter, between 8 a.m. and 8 p.m., except in a real emergency.
  • Use current LTB forms. Rules changed on September 21, 2026: an own-use Form N12 served on or after that date with at least 120 days’ notice to the end of a term or rental period no longer requires one month’s compensation (a purchaser’s own-use notice is different), and the person named should move in within 60 days or a former tenant’s bad-faith application gets a presumption in their favour. The non-payment Form N4 is now 7 days for all tenancies. Old versions of the main landlord and tenant forms will not be accepted after November 30, 2026 — download fresh forms from Tribunals Ontario every time.
  • Renewals and endings: a fixed-term lease does not end the tenancy — it runs month to month. You cannot require a tenant to sign a new lease or to leave at the end of the term without a legal ground and the right form.
  • Complaints and disputes: issues will come up — noise, repairs, neighbours. How you handle tenant complaints and disputes in the first days usually decides whether they end in a quick fix or an LTB application.

DIY or hire a manager?

Do it yourself if you live nearby, have time for showings, screening, repairs and filings, and are comfortable with LTB forms. Hire a manager if the unit is a short-term or furnished rental with constant turnovers, if you are out of the GTA, or if one vacancy month would cost more than a year of fees.

Typical 2026 bands are 8–12% of collected rent for long-term management and 18–25% for short-term management, plus any placement fee for a new long-term tenant. Compare what is included — pricing, screening, inspections, turnover cleaning and tax filings — not just the headline percentage. See Airbnb management fees in Toronto and our Toronto Airbnb management page.

Frequently Asked Questions

What is the first step to renting out my property in Toronto?

Choose the lane first — long-term, mid-term (28+ nights) or short-term (under 28 nights) — then check legality. In Toronto a short-term rental must be your principal residence, City-registered for $390 a year and capped at 180 nights for the whole unit, and your condo board must also allow it.

What deposit can I legally collect in Ontario?

Only a last month’s rent deposit (one rental period, applied only to the last month, with interest at 2.1% for 2026) plus a refundable key deposit at actual replacement cost. Damage, pet, security and cleaning deposits are illegal.

Do I have to use the Ontario Standard Form of Lease?

Yes, for most private long-term tenancies in Ontario. Clauses that conflict with the Residential Tenancies Act are void even if signed, including extra deposits and no-pet clauses.

What can I ask when screening a tenant in Ontario?

Income information, credit references, rental history, employment confirmation, a guarantor, and a credit check with written consent. Consider income with credit and rental history, and never screen on Human Rights Code grounds.

How much can I raise rent in Ontario in 2026?

For a guideline-covered unit, 2.1%, once every 12 months, with Form N1 at least 90 days ahead. Units first occupied after November 15, 2018 are exempt from the cap, but the notice and timing rules still apply. The guideline does not limit the rent you ask a new tenant.

What taxes apply if I rent short-term in Toronto?

A 6% Municipal Accommodation Tax on stays under 28 nights since August 1, 2026, plus 13% HST, on top of income tax on your rental earnings. You must also file Toronto’s annual Vacant Home Tax declaration by April 30 — a vacant home is taxed at 3% of its assessed value.

Ready to rent your Toronto property without learning every rule the hard way? Talk to Home Again about management — we handle pricing, screening, registrations, guests and filings for Toronto and GTA owners.