The Real Cost of Losing a Tenant in Toronto

Tenant Turnover vs. Renewal: The Real Cost of Losing a Tenant in Toronto

For many Toronto landlords, a vacancy might seem like an opportunity to reset rent to market value. But in today’s rental environment, where lease-ups can take weeks and incentives are returning, an empty unit can cost far more than expected. Understanding the true cost of tenant turnover compared to renewing an existing lease is essential to protecting cash flow and keeping your investment profitable.

The True Cost of Tenant Turnover

Turnover expenses go far beyond simply losing a month of rent. When a tenant leaves, landlords face a combination of vacancy, marketing spend, incentives, and the risk of an unsuitable new tenant — all of which can add up quickly.

Vacancy and Lost Rent

Vacancy is often the largest expense. Average lease-up times in Toronto now range from twenty-four to thirty-four days, and freehold properties often sit even longer. A one-month gap can mean $2,200 to $2,800 in lost rent for a typical condo or $1,700 to $2,500 for a freehold. Units priced above market can stay vacant well beyond a month, quickly eroding expected income.

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Incentives and Rent Discounts

To compete for tenants in a crowded market, many landlords are once again offering perks such as a free month of rent, annual discounts if leases get renewed, or parking discounts. While these concessions can help secure a lease, they reduce effective annual rent and directly impact returns.

Marketing Expenses

Advertising a vacant property also adds cost. Professional photography, premium listing placements, and paid rental platform exposure can quickly add up. Preparing the property for showings — painting, deep cleaning, repairing flooring, or servicing appliances — often costs hundreds to several thousand dollars depending on the unit’s age and condition.

Screening Risks With One-Time Leasing Agents

Another hidden cost comes from using one-time leasing agents. Many real estate professionals primarily focused on buying and selling homes will occasionally lease a property to earn quick commission income. While not inherently bad, these agents may lack deep expertise in tenant screening or long-term property management. Their involvement usually ends once the lease is signed, leaving the landlord to manage any issues that arise later. At LandLord, we’ve increasingly seen owners come to us after struggling with problematic tenants placed through quick lease-ups — issues such as late payments, property damage, or Landlord and Tenant Board disputes. A poorly screened tenant can add thousands in legal fees, lost rent, and repairs, far outweighing any initial savings from a fast lease.

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The Total Financial Impact

When vacancy loss, incentives, marketing spend, property refresh costs, and the risk of an unsuitable tenant are combined, turnover can easily consume the equivalent of one to two+ months of rent. In today’s market, those costs often outweigh the benefit of asking a slightly higher price from a new tenant.

The Power of Renewal

Keeping a reliable tenant is almost always less expensive than finding a new one. Renewing a lease avoids vacancy, marketing costs, and the risk of a poorly screened applicant. Cash flow remains uninterrupted, and a positive landlord-tenant relationship often leads to longer stays and fewer disputes.

A modest rent increase can still outperform taking a unit back to market and risking weeks of vacancy. Even matching current market rent may feel like a short-term loss but helps avoid re-rental costs and keep a dependable tenant.

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Strategies to Maximize Renewals

Avoiding turnover starts long before lease end. Landlords who invest in their tenant relationships and property upkeep are far more likely to keep good renters for the long term.

Make Tenant Satisfaction a Priority

Keeping a good tenant happy is the best way to reduce turnover. When renters feel heard, respected, and well cared for, they’re far less likely to leave at the end of their lease. But if they feel ignored or believe the property isn’t maintained, they’ll look to move as soon as they can. A positive relationship also makes turnover smoother when needed— cooperative tenants will allow and prepare for showings, while unhappy ones may refuse or sabotage them, making even a reasonably priced unit hard to lease.

Communicate Early and Often

Reach out about renewals ninety to one hundred and twenty days before the lease ends. Give tenants clarity about upcoming rent adjustments and lease terms so they have time to plan. Early, transparent communication builds trust and shows you value the relationship.

Be Responsive to Maintenance Requests

Respond quickly to repair and service requests. Even if a fix will take time, acknowledge the request, explain the next steps, and give updates. Tenants who know their concerns are being addressed feel valued and safe in their home.

Show Care Through Inspections and Upkeep

Conduct routine, respectful inspections to catch issues early and demonstrate that the property is well-maintained and safe. Simple updates — fresh paint, modern fixtures, or appliance upgrades — show tenants that their home is cared for and worth staying in.

Be Transparent About Rent Changes

Explain rent increases clearly and ensure compliance with Ontario’s regulations. When tenants understand how and why rent is adjusted, they are more likely to accept changes without frustration.

Create a Convenient Living Experience

Offer easy ways for tenants to communicate, such as online portals or clear service channels. Make paying rent and submitting requests simple and stress-free. A smooth, professional experience keeps tenants satisfied and less likely to leave.

When Turnover May Happen

While keeping good tenants is almost always the best financial move, there are situations where a turnover can occur — either because the tenant chooses to leave or because the landlord has a valid legal reason under Ontario’s Residential Tenancies Act.

Some landlords face turnover when a long-term tenant decides to move and the unit’s rent is well below current market rates. Others may deal with persistent non-payment, property damage, or serious lease violations that can lead to a legal eviction process if properly documented. In some cases, landlords plan major renovations or a change of use that legally requires vacant possession, but these situations have strict notice and compensation rules and must follow provincial regulations.

Because Ontario’s tenancy laws are highly protective of renters, landlords should weigh the true cost of vacancy and ensure any action to recover a unit is legally compliant and financially justified.

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Bottom Line

Vacancy in Toronto’s current market is expensive and time-consuming. Lost rent, incentives, repairs, marketing, and the risk of a poorly screened tenant can quickly erase one to two+ months of income. For most landlords, a well-planned renewal strategy is the smarter financial move.

LandLord Property & Rental Management has thirty years of Toronto property management experience helping landlords price units competitively, screen tenants thoroughly, comply with Ontario regulations, and retain great renters. Contact us today to protect your cash flow and reduce the hidden costs of turnover.