Jane Tsang says her monthly condo expenses are higher than the rent she receives from her tenant.Arlyn McAdorey/The Globe and Mail
Jane Tsang didn’t set out to be a long-term landlord when she bought her one-bedroom condo in downtown Toronto five years ago.
She’d been planning to briefly rent out the unit, which she purchased for $550,000, until she and her partner could move in together after she graduated university. But they broke up just after the sale closed.
It didn’t make financial sense to live in it alone, so Ms. Tsang, a 26-year-old content creator in Toronto, changed her plans. She decided to rent it out for the long haul and continue living with her parents, which she said she enjoys and allows her the flexibility to travel regularly.
Ms. Tsang now rents the condo out for $2,200 a month. Her monthly condo expenses are higher than the rent she’s receiving – she pays an additional $800 a month out of pocket – and she’s just about to renew her mortgage at a higher interest rate than the 1.99 per cent she has been paying since she bought the condo.
But Ms. Tsang is at peace with the situation. She has a good tenant, and she’s making good money now. And she says she believes that in the long run, the condo market will rebound from its current sluggish state.
“I try not to look back in regret,” she said. “And I feel pretty confident [the market] will overall trend up.”
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A segment of first-time buyers who purchased condos in the past five years have become accidental landlords. Faced with changing life circumstances – whether inability to afford what they purchased or a desire to move up the property ladder – these homeowners are assessing a difficult housing market and deciding to rent out their units rather than sell for less than what they paid.
“Their goal, when they listed, was not to become landlords. As the market shifts and changes and people don’t want to take losses, they don’t like where prices are at, they’re like, ‘let’s just rent it out,’” said Tom Storey, a Toronto realtor.
Mr. Storey said these buyers typically bought their condos to live in, but have either struggled with the carrying costs of condo ownership or just want to move up into a home more suitable for their life stage. He has worked with several clients this year who put their condos up for sale and received underwhelming offers. As they didn’t feel financially pressed to sell, they ultimately decided to rent them out until the market recovers.
Condo prices across the country have dropped since their pandemic highs. A late June report from RBC Economics said the condo price corrections have been “sharper than other housing types” and returned affordability to 2019 levels in many markets, although Montreal, Quebec City and Halifax haven’t yet seen meaningful price declines.
In the previously overheated Toronto market, the median apartment condo price was down nearly 9 per cent year-over-year to $541,000 in the second quarter of 2026, according to the Canadian Real Estate Association. And in Metro Vancouver, the benchmark apartment condo price was $695,200 as of July, a 7.1-per-cent year-over-year decrease.
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Average rents have declined thanks to a greater supply of condos and lower immigration, but Mr. Storey said they are still “fairly competitive.” A two-bedroom east-end Toronto condo he listed earlier this year netted no worthwhile purchase offers, but six rental offers. He said his team is doing “more rentals than ever before.”
Ron Butler, a Toronto mortgage broker, said many first-time buyers who bought in the past five or six years have moved in only to realize that condo ownership was far more expensive than just their mortgage payments.
He pointed out that with a tough job market, stagnating wages and rising condo fees and property taxes, “this whole issue is just getting worse” for these young condo owners.
“Instead of a successful investment or a step onto the property ladder, this thing has turned into financial destruction for young people,” Mr. Butler said.
Jane Tsang says she believes that in the long run, the condo market will rebound from its current sluggish state.Arlyn McAdorey/The Globe and Mail
When Francesca Parc and her partner bought their condo about an hour outside of Toronto in February, 2022, for $520,000, she said they believed that “owning was a great investment, and no matter what time you sell, you’re going to make money.” Ms. Parc, a correctional officer, said she fell into the trap of comparing herself to other people her own age who were settling down and buying homes.
Reality hit once they moved in: The commute into Toronto for work was “killing us,” she said. There were also costs the couple didn’t anticipate, including condo fees that rose from $400 a month when they bought to about $770 today. She said buying the condo is the worst financial mistake she has made.
The couple opted to rent their place out and move to Toronto to rent from her parents while they wait for the market to recover. Their tenant pays $2,400 a month, and Ms. Parc estimates she and her partner pay an additional $10,000 a year to cover their mortgage and other homeownership expenses. They also pay her parents $2,000 a month in rent.
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Jason Heath, a certified financial planner and managing director of Objective Financial Partners in Markham, Ont., said he has been bothered in recent years by the “extremely biased” financial advice that many young first-time buyers receive from people who already own homes about the importance of getting into the housing market.
“I feel bad for young homebuyers. They were almost forced into putting everything they had into buying whatever they could afford and taking on as big a mortgage as possible,” he said.
Mr. Heath cautioned that first-time buyers who rent out their homes too soon after purchasing them can affect their qualification for government incentives for first-time buyers – including the use of the federal Home Buyers’ Plan through their registered retirement savings plans, the sales tax rebate on new builds and land transfer tax rebates.
He said that people deciding to rent their homes out while waiting for the market to rebound should consider how long they can reasonably afford to do that.
“It may not be as soon as some people think,” he said. “Sometimes selling may be an easier way to recover your money by reallocating it somewhere else, rather than owning a rental property that’s not a good investment and being a landlord you never wanted to be in the first place.”
Ms. Parc said being a landlord has largely gone smoothly so far. She and her partner have a great tenant – which she said was a result of the time she put in up front to check references and vet prospective renters – but have had some challenges. Both the dishwasher and laundry machine in the unit broke. Ms. Parc had to order replacements, arrange the deliveries and make sure they were installed.
“That’s the biggest reality of being a landlord – when something breaks, it’s your responsibility to deal with it promptly,” she said.
Ms. Tsang said she’s mindful of the continuing discourse online around some landlords depending on renters to manage their financial issues. Now that she is one, she said she isn’t bothered by receiving rent that doesn’t fully cover her condo costs.
“I’m affected by the landlord discourse on [making] money off somebody living at your place,” she said. “If that’s the ‘least’ I could do, accepting the lower rent, it’s like I’m already still profiting off it in some ways, even if it looks like I’m cash flow negative.”