As Toronto’s housing market continues to grapple with fluctuations, many young homeowners are finding themselves in unexpected roles as landlords. This trend has emerged from shifting life circumstances and a challenging economic landscape, prompting these individuals to rent out their properties rather than sell at a loss.
A Shift in Plans for Young Landlords
Jane Tsang never intended to become a landlord when she purchased her one-bedroom condo in downtown Toronto five years ago for £550,000. Initially, she planned to rent it out briefly until she and her partner could move in together. However, after their relationship ended shortly after the sale, she opted to rent out the unit long-term instead of living alone. At 26, Tsang, a content creator, enjoys the flexibility of living with her parents, which allows her to travel frequently.
Currently, Tsang rents her condo for £2,200 a month, but her monthly expenses exceed that amount. She finds herself paying an additional £800 out of pocket and is facing a mortgage renewal at a higher interest rate than the 1.99% she previously enjoyed. Despite these challenges, she remains optimistic about the long-term prospects of the condo market. “I try not to look back in regret,” Tsang commented. “And I feel pretty confident [the market] will overall trend up.”
Accidental Landlords in a Shifting Market
The phenomenon of accidental landlords has gained traction among first-time buyers who purchased condos in the past five years. Faced with life changes—whether it’s the inability to afford their property or a desire for a larger home—these homeowners are choosing to rent rather than sell at a loss. According to Tom Storey, a Toronto realtor, many buyers initially intended to live in their condos but are now renting them out as they navigate a challenging market. “Their goal, when they listed, was not to become landlords,” Storey explained. “But as prices stagnate, they’re deciding to hold onto their investment for now.”
Condo prices across Canada have experienced a notable decline since their pandemic peaks. A report from RBC Economics in late June highlighted that the corrections in condo prices have been more pronounced than in other housing types, returning affordability to levels seen in 2019. For instance, the median price for an apartment condo in Toronto fell nearly 9% year-over-year, landing at £541,000 in the second quarter of 2026, while in Metro Vancouver, the benchmark price decreased by 7.1% to £695,200 as of July.
Rising Challenges for Young Homeowners
With average rents decreasing due to increased supply and lower immigration, the rental market remains competitive. Storey noted that while a two-bedroom condo he listed received no worthwhile purchase offers, it garnered six rental applications. As a result, many real estate professionals are experiencing a surge in rental transactions.
However, the financial pressures on young homeowners are substantial. Ron Butler, a mortgage broker in Toronto, remarked that many first-time buyers have discovered that the costs associated with condo ownership extend beyond just mortgage payments. “This whole issue is just getting worse,” he stated, highlighting the burden of rising costs such as condo fees and property taxes.
Francesca Parc and her partner bought their condo about an hour outside Toronto in February 2022 for £520,000, believing it would be a solid investment. Yet, they soon found the commute taxing and condo fees skyrocketing from £400 to £770 per month. This led them to rent out their condo for £2,400 a month while they moved back to Toronto to live with her parents, facing additional expenses of around £10,000 annually for their homeownership costs.
Navigating the Complexities of Being a Landlord
Though renting out their units has provided some financial relief, both Tsang and Parc have encountered the realities of being landlords. Parc, who managed to secure a reliable tenant, faced unexpected challenges when appliances broke down, requiring her to arrange for repairs. “That’s the biggest reality of being a landlord,” she said. “When something breaks, it’s your responsibility to deal with it promptly.”
Young homeowners, such as Tsang and Parc, are navigating a delicate balance between managing their properties and their own financial wellbeing. Tsang acknowledged the ongoing discourse surrounding landlords and the perception that they profit from their tenants. “If accepting lower rent is the least I can do, I still feel I’m benefiting from it in some ways,” she said, despite being cash flow negative.
Why it Matters
The rise of accidental landlords in Toronto reflects a broader trend within the housing market, highlighting the struggles faced by young homeowners amidst economic uncertainty. As they grapple with rising costs and stagnant wages, the decision to rent rather than sell can provide temporary relief, but it also poses significant long-term financial implications. Understanding this evolving landscape is crucial for policymakers and stakeholders as they seek solutions to support first-time buyers and promote a healthier, more sustainable housing market.