It’s not uncommon for Canadians to buy a condo with the idea of renting it out — sometimes as an investment, sometimes with help from family, and often with the hope that the property will “pay for itself” over time. But the reality can be more complicated.
A reader recently shared a story that will sound familiar to many people. Their parents helped them buy a pre-sale condo a few years ago. It’s now rented out, but the rent doesn’t cover the mortgage and fees. Every month, they pay more than $1,300 out of pocket to keep the property afloat. They appreciate what their parents did, but the financial stress has become overwhelming.
So the big question is: should they hold onto the condo or sell it?
Let’s unpack that — and in doing so, cover what every condo owner should think about before deciding to rent out (or keep) a property that isn’t bringing in positive cash flow.
Understanding the Real Cost of Condo Ownership
Condos can be a smart way to build equity and invest in real estate, especially in growing markets like Toronto, Hamilton, and Guelph. But they also come with unique financial considerations:
- Strata or condo fees: These cover shared maintenance, insurance, and building reserves. They often rise each year.
- Vacancy periods: Even in hot rental markets, finding new tenants can take time — especially if you’re competing with newer developments.
- Repairs and wear: Units rented long-term experience more wear and tear than owner-occupied ones.
- Taxes and insurance: Rental condos usually require different coverage and may lose eligibility for certain property tax credits.
When you add all of this up, being “cashflow negative” — meaning your expenses exceed your rental income — is more common than people think.
The Emotional Side: Gratitude vs. Autonomy
The financial side is only half the story. Many young owners are in situations where family helped them buy, often out of love and good intentions. But what starts as a helping hand can sometimes feel like a set of golden handcuffs.
If you’re paying out of pocket every month, feeling anxious about tenants, or can’t pursue your own goals because of a property, it’s reasonable to question whether the investment still aligns with your life. Gratitude and independence can co-exist. You can appreciate what your parents did while also recognizing that circumstances have changed.
Selling doesn’t mean you’ve failed. It might simply mean you’re ready to take ownership of your financial path — on your own terms.
The Financial Perspective: Hold or Sell?
Here are some questions to help decide:
1. Is the condo likely to appreciate significantly soon?
If the condo is in a rapidly growing area or near new infrastructure (like a transit expansion), holding might make sense. Appreciation could eventually offset your short-term losses.
But if the market is flat or slow, and you’re covering a large monthly gap, those out-of-pocket payments may not be justified by the long-term gain.
2. Are you paying more than you can afford?
If the monthly shortfall is forcing you to make sacrifices elsewhere — delaying savings, travel, or education — the property is costing you more than money. It’s costing flexibility.
3. Would selling create a tax burden or loss?
If the unit has appreciated, you might owe capital gains tax on the increase since it became a rental. But if you’re near breakeven or facing a loss, that could offset some of your tax liability. A professional can help you calculate this.
4. Could refinancing help?
If your current rate or mortgage structure is outdated, refinancing may reduce your monthly payment. You might be able to extend the amortization or find a more competitive rate.
You can explore refinancing options here: Apply with The Local Broker.
The Reality of Being a Landlord
Renting out a condo sounds simple until you’re actually doing it. You’re responsible for repairs, tenant issues, lease renewals, and navigating rental law. You also carry the emotional weight of worrying about late rent or property damage.
For some, this is manageable. For others, it becomes a full-time mental load. If you find yourself constantly anxious or frustrated, that’s a sign it may not be the right investment for your lifestyle — and that’s okay.
Dos and Don’ts of Renting Out a Condo
Here are a few lessons worth remembering if you’re already renting or thinking about it:
✅ Do: Understand your full costs before listing
Include every expense — mortgage, condo fees, insurance, property tax, and occasional maintenance — to calculate your true cashflow position.
❌ Don’t: Assume rent will always rise
Rental markets fluctuate. Building new supply or local job changes can soften demand and impact what tenants will pay.
✅ Do: Check the building’s rental restrictions
Some condo corporations limit the number of rentals or require specific lease terms.
❌ Don’t: Ignore your time
Tenant turnover, maintenance coordination, and communication take effort. Even a “passive” investment needs active management.
✅ Do: Revisit your mortgage strategy regularly
Mortgage rates and terms change. A broker can compare options to see if refinancing or restructuring could ease your monthly strain.
Balancing Family Expectations and Financial Health
If family is part of your ownership story, communication matters as much as math. It’s natural for parents to want to hold onto property as a long-term investment. But your priorities may differ — especially if you’re juggling rent, savings goals, or career transitions.
Approach the conversation with honesty and respect:
- Share your financial reality clearly — what the numbers actually look like.
- Express appreciation for their help and explain your desire for independence.
- Focus on shared goals: stability, security, and reducing stress.
Most parents ultimately want their children to be financially secure — even if it takes time for them to see that selling might be part of that path.
The Bottom Line
Owning a rental condo can be a valuable investment — but only if it fits your finances and your life. If the numbers don’t add up, or the stress outweighs the benefit, it’s reasonable to reassess.
Sometimes, the smartest financial move is stepping back, reducing strain, and rebuilding from a position of strength.
Whether you choose to sell, refinance, or hold, make sure the decision reflects your goals — not just your obligations.
If you’d like to review your options, including how a refinance or mortgage restructure could improve your monthly cashflow, I’d be happy to help. You can start with a quick, no-obligation review here:
👉 Apply with The Local Broker
