Should You Sell Your Ontario Rental Property Tenanted or Vacant?

Selling a rental property in Ontario? Keeping the tenant in place can preserve rental income while you sell and appeal to investors. Selling vacant can make showings and staging easier and open the door to buyers who want to move in. The better option depends on the current rent, your carrying costs, who is likely to buy the property, and whether you can lawfully deliver vacant possession.

Can you sell a rental property with tenants in Ontario? Yes. The sale itself does not end the tenancy. If the tenant remains at closing, the buyer generally becomes the new landlord and takes over the existing tenancy on its current terms. 

See the Residential Tenancies Act, 2006

Selling tenanted vs. vacant at a glance

What are Ontario’s rules for showing a tenanted property to buyers?

For buyer showings under section 27 of Ontario’s Residential Tenancies Act, give the tenant at least 24 hours’ written notice. The notice must state the reason, date and time of entry, and the visit must take place between 8 a.m. and 8 p.m. A predictable showing schedule can help the tenant plan around visits. 

See the Landlord and Tenant Board’s guidance on entry and tenant rights

Can you offer vacant possession when selling a rental?

If the property is occupied, speak with an Ontario real estate lawyer before promising vacant possession on a specific closing date. A tenant may choose to move out or voluntarily agree in writing to end the tenancy. In some sales, a landlord with a signed agreement of purchase and sale can serve a Form N12 on behalf of an eligible purchaser who genuinely intends to have an eligible person move in. That process has eligibility, notice and compensation requirements, and the tenant can challenge the notice at the Landlord and Tenant Board. Serving an N12 does not guarantee that the unit will be vacant on closing. See the Landlord and Tenant Board’s guide to ending a tenancy and sections 49 and 49.1 of the Act

How do you decide which option makes financial sense?

Start with the rent the tenant actually pays. If you expect the same closing timeline either way, compare the rent you’d give up with any extra costs to prepare and market the home vacant. For example, at $2,800 per month, two months of vacancy would mean $5,600 in forgone gross rent before any extra cleaning, repairs or staging. If one option is likely to take longer, add the carrying costs for those extra weeks or months. Include mortgage payments, property taxes, condo fees where applicable, insurance and utilities.

Then compare who is likely to buy and what comparable properties have sold for. An Oakville condo with documented rent and manageable condo fees may appeal to investors who want income from day one. A townhouse that competes mainly with homes bought by people planning to move in may benefit from the broader buyer pool that vacancy can offer. Compare recent sales of similar properties and check which ones sold tenanted or vacant where that information is available.

Planning to sell a rental property in Oakville?

If you’re weighing your options in Oakville, Burlington, Milton or Mississauga, we can review the current rent, likely buyer pool and recent comparable sales with you. 

Contact Jay Cares Real Estate to compare both scenarios for your property.

For more about leasing and managing a rental, explore our services for landlords.