Renting Out Your Pre-Construction Condo: Landlord Guide

So you snagged a pre-construction condo in Toronto. Smart call. Modern build, lower energy costs, decent appreciation potential if things go your way.

But you’re not living there. You want to rent it out.

Here’s the thing: you can’t just hand someone the keys and start cashing checks. There are occupancy rules. Tax stuff that’ll blindside you if you’re not careful. Landlord responsibilities you may not have dealt with before.

It’s not rocket science. But it does need a plan.

Hi, my name’s Jatin Gill, and I spend my days helping people across Ontario make smarter decisions in the pre-construction space, from purchase to profit. And, in this guide, I’m walking you through the real mechanics of renting out a new condo before you ever sign a lease or set foot in the unit as a landlord. 

Read: Step-by-Step Guide for First-Time Pre-Con Buyers

Why Rent Out a Pre-Construction Condo?

Renting out a pre-construction condo isn’t some genius hack; it’s just a practical way to bridge the gap between paying your mortgage today and actually building wealth down the road. 

Some folks do it because they’re betting on appreciation. Others? They just need the thing to pay for itself while property values do their thing. Whatever the reason, the numbers tend to work out.

Read: Pre-Construction Condos 101: A Beginner’s Guide

Why People Actually Do This:

• High Rental Demand: Cities like Toronto, Ottawa, Mississauga, Vaughan, Markham,  new condos don’t sit empty. 
• Two Ways to Make Money: Rent covers your costs (hopefully with a bit left over). Meanwhile, the property’s value ticks up in the background.  
• New Builds Practically Rent Themselves: Tenants want granite counters, energy-efficient everything, and a gym that doesn’t smell like 1987. You’ve got all that. Plus, you’re not fixing ancient plumbing or replacing carpets that predate the internet.
• Rent Control? Not Your Problem: Anything first occupied after November 15, 2018, sits outside rent control in Ontario. So you can bump rent based on what’s actually happening in your area, not some arbitrary provincial cap.

What You Should Actually Think About:

A few things to sort out first:

• What Are You Even Trying to Do Here? Monthly cash flow? Long-term equity? Both? Your answer changes literally everything about how you set this up.
• Being a Landlord Is Actual Work: Screening people. Fixing stuff when it breaks. Paperwork. Phone calls at inconvenient times. If that sounds terrible, you can pay someone else to deal with it, but it’ll cost you a chunk of your rent.
• You Need Financial Cushion: Deposits. Interim occupancy fees. Closing costs. That month when nobody rents it. The dishwasher that dies for no reason. If your budget’s tight already, this might not be the time.

At the end of the day? This can be a solid move if your finances are stable, your goals are clear, and you’re cool with the landlord thing. But don’t pretend it’s passive income — because it’s really not.

Read: Buying Pre-Construction Condo in Ontario: Interim Occupancy vs Final Closing

Preparing Your Pre-Construction Condo for Rental

Timing matters. A lot. You’re not just prepping a unit, you’re trying to line up builder timelines, financing deadlines, and tenants who are ready to move in yesterday. So let’s break down how to actually pull this off without losing your mind.

Getting the Timing Right (And Why It’s Trickier Than You Think)

• Pre-Construction Timeline Mastery: There are basically three phases here: buying it, interim occupancy, and final closing. That middle part? It’s weird. You’ve got keys but not ownership. You’re paying occupancy fees, a combo of estimated property taxes, condo fees, and interest on what you still owe the builder, but no mortgage yet.
• Interim Occupancy Phase (AKA “Phantom Rent”): Yes, you can rent it out during this window. And honestly, you probably should. The goal is simple: tenants’ rent covers those occupancy fees, ideally with a bit extra. Think of it as a dress rehearsal before the real thing kicks in.
• Delays Will Happen: Anyone who’s done this before will tell you, delays are part of the deal. Supply chain mess, city approvals dragging their feet, whatever. Build in some buffer time for both your budget and your tenant hunt.

Read: Everything You Should Know about Interim Occupancy in Canada

Making the Unit Actually Rentable

This is where you quietly add value without overthinking it. When you’re picking finishes during the design phase, skip the super personalized stuff that screams “this is MY taste.” Go with:

• Tenant-Friendly Finishes: Neutral, tough materials. Laminate or vinyl floors. Classic tile. Soft wall colours. Stuff that holds up and looks good in photos.
• Strategic Upgrades: Spend money where it actually matters. Energy-efficient appliances, built-in storage, better lighting; things that make life easier, not just Instagram-worthy. These let you charge a bit more rent without scaring people off.

The Money Stuff (Because Of Course There’s Money Stuff)

Let’s talk numbers. Because you have to.

• Budgeting for Closing Costs: There are extras you might not see coming, land transfer tax, legal fees, development charges, and utility hookups. They add up fast.
• Securing Financing: Get your mortgage sorted early. Lenders care about your rental plan, and if interest rates move around, your cash flow can shift before you know it.
• HST Rebate Awareness: Here’s the kicker. If you’re renting instead of living there, you don’t get the New Housing Rebate the builder assigns. You’ll pay full HST at closing. But,  and this is important, you can apply for the New Residential Rental Property (NRRP) Rebate directly with the CRA after you’ve rented it out for at least a year.
• Expert Tip: Talk to a tax specialist before you close. Half an hour with someone who knows this stuff can save you thousands and a ton of stress later.

And don’t forget the ongoing expenses. Property taxes. Condo fees. Insurance. A little emergency fund. Because in real estate, the thing you didn’t plan for always shows up right after you think you’re covered.

Read: Getting a Mortgage for a Pre-Construction Condo

Finding and Screening Tenants

Finding a good tenant for your pre-construction condo isn’t about throwing up a listing and crossing your fingers. It’s more like… well, it’s a bit like dating. 

Getting Your Unit in Front of People:

• Leverage Online Platforms: Don’t just pick one site and call it done. Post everywhere — Realtor.ca, Kijiji, Zillow, Rentals.ca, Zumper, whatever local boards exist in your area. More visibility = better leads. Usually.
• Highlight What Actually Matters: Brand new unit. Modern amenities. Close to transit. Nice balcony, good views, open layout, whatever makes yours stand out. 
• Professional Presentation: Good photos aren’t optional. They just aren’t. If you can swing a virtual tour, even better, saves you from a dozen “can I come see it right now?” texts.
• Consider Using an Agent Who Gets Rentals: A real estate agent who specializes in rentals can be worth the commission. 

Actually Vetting Who You’re Renting To:

• Do Your Homework: Credit check. Employment verification. References from previous landlords. It’s not being nosy; it’s protecting your investment.
• Stay Legal: Use the Ontario Standard Lease for most tenancies starting after April 30, 2018. And remember the Human Rights Code, there are 17 protected grounds you can’t discriminate on. Period.
• Trust Your Instincts a Bit: Numbers tell part of the story, but not all of it. Does their lifestyle make sense for the unit? Are they looking for something long-term? Do they seem like they’ll actually take care of the place? A tenant who treats your condo like it’s theirs is worth way more than someone who just pays on time.

Figuring Out What to Charge:

• Do Some Market Research: Check current listings. Look at CMHC reports. See what your local real estate board says. Know what’s realistic before you set a number.
• Don’t Just Chase Top Dollar: Yeah, you want good rent. But sometimes offering a small incentive, like knocking a bit off the first month, locks in a solid tenant faster. Especially with a new build where competition’s tight.

Finding the right tenant is part spreadsheet, part gut feeling. Get this part right and your condo starts paying for itself with way less drama than you’d expect.

Understanding Ontario’s Dual Legal Framework for Condos

Owning a pre-construction condo in Ontario means you’re dealing with two different rulebooks at the same time: the Residential Tenancies Act (RTA) and the Condominium Act. It’s kind of like trying to follow two different GPS apps while driving; sometimes they agree, sometimes they don’t, and you really need to know both if you want to avoid getting lost (or sued).

The Residential Tenancies Act, 2006 (RTA):

• Landlord-Tenant Basics: This covers the usual stuff: rent payments, maintenance, security deposits, how to end a tenancy properly.
• What Landlords Need to Know:
  • Rent Control Exemptions: If your unit was first occupied after November 15, 2018, you’re not stuck with the annual rent increase caps. You can bump rent to match the market (just give 90 days’ notice).
  • Limited Reasons to Evict: Non-payment. Property damage. You need to move in. You sold it, and the buyer’s moving in. That’s pretty much it. And don’t forget, you need 60 days’ notice for “no-fault” evictions.
  • Last Month’s Rent Deposit: You can take one month upfront. That’s it. No extra damage deposits or security fees. And yes, you owe interest on that deposit annually.
  • Entry Rules: You need to give 24 hours’ written notice before showing up. Emergencies are the exception.

The Condominium Act, 1998 (Condo Act):

• Governs How Condos Actually Run: This one spells out what owners, the board, and tenants are responsible for. Your tenants have to follow the condo’s rules too, not just yours.
• The Condo Corporation’s Paperwork:
  • Declaration, Bylaws, Rules: These tell you what flies and what doesn’t. Pets, parking spots, using the gym or pool. Break these, and you’re looking at fines or legal bills.
  • Your Job as Landlord: Tell the condo corporation within 10 days of renting the place out. Give them the tenant info. Make sure your tenant follows all the rules.
  • Leasing Restrictions: Some buildings require minimum lease terms. Others ban short-term rentals outright. Check before you sign anything.

Interim Occupancy:

• While you’re paying “occupancy fees” to the developer, whatever your tenant pays you is still legally considered rent under the RTA. So make sure your lease lines up with both the occupancy period and your final closing date.

What You’re On the Hook For (Under Both Acts):

• Keep the Unit Working: Everything needs to stay in good shape, including stuff covered by Tarion warranties.
• Follow Condo Rules: Pets, noise levels, and booking amenities. Stay on top of it, or you’ll hear from the board.
• Where Disputes Go: RTA problems? That’s the Landlord and Tenant Board. Condo issues? Could be the Condominium Authority Tribunal, or you might need a lawyer.

Knowing this stuff upfront saves you from fines, drama, and headaches you don’t need. A bit of homework now makes everything way smoother later.

Read: New Home Warranty Programs (Tarion) Explained

Managing Your Condo as a Rental Property

Alright, so you’ve got a tenant. Now what? This is where the actual landlord stuff kicks in. You’re basically keeping three plates spinning at once: your tenant, the condo board, and the property itself.

The Daily Grind:

• Staying in Touch with Your Tenant: They need to be able to reach you. Broken dishwasher, leaky faucet, random question about garbage day, whatever. Answer fast, stay professional, and you’ll avoid most drama before it starts.
• Working with the Condo Corp: Not everything goes through you. Common area repairs? Building notices? Booking the guest suite? That’s all condo management. Figure out who does what early, or you’ll waste time chasing the wrong people.
• Collecting Rent (And Actually Tracking It): Set up something that works, auto-debit, e-transfer, or software. Just make it consistent. And write everything down. Income, expenses, all of it. Future-you will be grateful when tax season rolls around.

Should You Just Pay Someone Else to Do This?

• What a Property Manager Actually Does: They talk to tenants, handle repairs, collect rent, make sure you’re following the law, and list the place when it’s empty.  
• What You’ll Pay: Around 8 – 10% of the rent each month. Sometimes extra fees upfront or when they place a new tenant.
• When It’s Worth It: If the thought of dealing with tenant calls at 9 PM makes you tired, or you just want someone else handling it, yes, probably worth the cost.

Don’t Sleep on Your Tarion Warranty:

• What It Covers: Year one: workmanship, materials. Year two: water leaks, electrical, plumbing, heating. Year seven: big structural stuff.
• How It Works: You report problems in your unit. Condo corp reports common area issues. File on time, and you’ll keep tenants from complaining while catching problems before they get expensive.

The Money Side (Because Taxes Are Coming):

• Track Everything: Rent coming in. Every dollar going out. Mortgage interest, condo fees, insurance, repairs, property manager cut, ads you ran, gas money to drive there, all deductible. Keep receipts.
• You’ll Owe Taxes: Rental income counts as income. Shocking, I know. A decent accountant can help you claim everything you’re allowed to, sort out the HST rebate mess, and prep for capital gains if you ever sell.

Mitigating Risks as a Landlord

Being a landlord sounds easy until it’s not! Risks are part of the deal, some obvious, some not. 

When Nobody’s Paying You Rent:

• Keep It Rented: Don’t overprice it just because it’s new. Get photos up early, like way before you even have keys. Be decent to your tenant; people don’t move out when they’re happy.
• Cash Buffer: Three to six months of expenses sitting somewhere you can grab it. Covers the gap when someone moves out. Or that middle-of-the-night fridge situation where you can’t wait three days to fix it.

Tenants Who Make Your Life Difficult:

• LTB isn’t Intuitive: The Landlord and Tenant Board deals with unpaid rent, trashed units, lease violations, all of it. Learn how it works now, not when you’re panicking because someone stopped paying two months ago.
• Landlord Insurance Is Required: Property damage, lost income if something insurable happens, and liability coverage. Just get it.
• Tenants Should Have Insurance Too: You can’t make them unless your lease says so, but push hard for it anyway. When their laptop gets stolen or they flood the bathroom, you don’t want that becoming your problem.

Stuff the Market Does to You:

• Pay Attention: New condos opening nearby? Rents dropping in your area? Demand shifting because transit’s changing? The more you watch, the less likely you are to get caught off guard.
• Interest Rates Aren’t Static: They go up. Your mortgage payment goes up with them. Your cash flow gets tighter. Have a plan before it happens, not after.

Rules That Won’t Stay Still:

• Laws Shift Around: What you could do last year might not fly this year. Rental regs change. Bylaws get updated. Condo rules get rewritten. Keep up or you’ll step in something.
• Lawyer Who Knows This Stuff: Real estate law, specifically landlord-tenant. They’ll catch problems in your lease before they become expensive. Make sure evictions are done legally so you don’t get dragged into a mess.

Managing risk? It’s about doing homework ahead of time, staying aware, and having the right people in your corner.

Key Resources for Ontario Landlords

Landlording in Ontario means dealing with a bunch of different rules that don’t always play nice together. Laws, condo boards, the tax folks, your tenant who texts at weird hours. Here’s where to actually find answers when you need them:

Bottom Line

Renting out a pre-construction condo isn’t just about covering your mortgage. It’s how you build wealth, learn the landlord game without diving in headfirst, and add another property to your portfolio without starting from scratch. 

Here’s what matters most:

• Plan for the messy parts: Interim occupancy fees. Delays that will happen. Ongoing costs that sneak up on you.
• Don’t rush tenant screening: A good tenant makes everything easier. Bad ones make you question your life choices.  
• Follow the rules: RTA, Condo Act, whatever your city requires. Skip this and you’ll spend way more time and money fixing problems later.
• Use people who know what they’re doing: Realtors, property managers, lawyers, accountants, they’re not optional extras.  

If you’re thinking about getting into pre-construction rentals and want someone who knows the Ontario market inside out, reach out to us at Platinum Condo Deals. We help investors find the right properties, figure out how to make them profitable, and handle the complicated stuff so you’re not doing this solo.