How Does a Rent to Own Condo Work in Toronto? — Should You Buy or Rent?

A rent to own system in Toronto is an excellent solution for the unstable real estate market in the bustling city. However, if you don’t fully understand the regulations and the benefits, you could end up being taken advantage of or enter into an agreement you aren’t ready for. To help you navigate these unknown waters, our team will illustrate everything in this rent to own condo Toronto guide. 

How Does a Rent to Own Condo Work in Toronto?

toronto skyline at daytime

What Does Renting to Own a Condo Mean?

The renting to own concept in Toronto is an agreement in which the tenant pays rent every month to the owner/landlord, similar to regular renting. The difference between rent-to-own condos in Toronto and traditional renting is that a part of your rental fee is taken and put towards a future down payment for the condo in question should you choose to purchase it in the future.

This is an excellent idea and solution to the housing crisis because you won’t need to pay rent and set money aside for a down payment, which can be a hefty amount. Instead, you can live in your potential forever home, while putting money towards it every month. This method is an excellent way for folks who cannot come up with down payment immediately or those who suffer from bad financial credit. 

Buying a Condo In Toronto

After understanding what a Toronto rent to own condo is, it begs the question of whether buying a condo if you can is a better option or if renting a condo to own makes more sense. Our experts will first break down the advantages and disadvantages to buying a condo in Toronto. 

(For other alternative, you can also opt to buy pre-construction condominiums in Toronto)

Advantages and Disadvantages

As the first advantage, it makes sense financially that all your money will be put to good use and go towards your forever home. All your money is going into your mortgage and not someone else’s. Right when you purchase the home, it’s yours as long as you can make the payments. This means you will be able to decorate however you wish, as long as it is within regulations. 


If you decide to sell the condo in the future, you stand to make high gains. If you manage to find a good real estate deal, it could be cheaper than renting to own in the long run, especially if you don’t decide to purchase the property. Real estate in a pricey city like Toronto is always a good investment, especially if the housing prices continue to skyrocket.

However, there are downsides to purchasing a condo. Buying is an immense commitment and if you stretch yourself too thin or enter into an agreement that you are striving to meet, it could put a lot of undue strain on your shoulders.

You are essentially locking yourself in for the next 20 to 25 years on average [1] and you cannot change your mind unless you sell the property. In addition, selling at the wrong time can cause you to lose thousands.

Oftentimes you won’t realize how much you dislike the area or if there are inconveniences and drawbacks to the condo itself until you have lived in it. By that time, it would be too late to back out of the deal. 

Renting to Own a Condo In Toronto

Renting to own sounds too good to be true, and it can be if you don’t know if you’re eligible. Our experts will outline exactly how to obtain a rent to own condo in Toronto.


It is advised to seek legal counsel and ask all the things about renting a condo in order to go over the contents of the agreement. The requirements will vary from condo to condo and real estate agencies. However, know that you won’t be limited to your credit score and down payment funds.

blue and white buildings in toronto


To set up rent-to-own condos in Toronto, consult with a real estate agency to see what properties are available in this format in the area you are considering. Your eligibility will again depend on the condo development, the renter/landlord and the real estate firm. This is why our experts suggest seeking legal advice and hiring your own legal representative to go over the finer details of the contract.

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Again, the costs much like the stipulations in the contract will vary. However, our team have included some general points to watch out for. 

Pay attention to the rent amount outlined in Toronto condo rental fees, the final purchase price of the property, how much of your rental fee is going towards the future down payment, and more.

Also, stating in black and white who is responsible for the utilities, how the rent is to be paid and the due dates, when you are able to legally take possession of the property, and illustrate an agreed upon window of opportunity for the final purchase. There is a lot more than just these points to consider, which is why a legal advisor is important. 

Advantages and Disadvantages

What are the benefits of rent-to-own condos in Etobicoke and Toronto other than the flexibility of purchase, and no credit score or down payment required? It helps to allocate your money better and you can have peace of mind knowing that a portion of your rent is not entirely wasted on someone else’s mortgage.


There are also major disadvantages to a rent to own condo Toronto. Make sure you do your due diligence to avoid any scams or schemes.

Aside from that, you will have to play by the same rules as a mortgage where if you consistently fail to pay rent, you may have to forfeit any claims on the property. On these types of condos, the rent also tends to be higher as a portion will go to the future down payment.

Most often, the price can’t be renegotiated, which means if the property price declines, you could lose money. While you’re renting and before the property is legally yours, you cannot make certain alterations to the interior.

Lastly and perhaps the most significant drawback, is that you will lose all your equity in the property that has gone into the down payment from your rent if you decide not to purchase it. 


How much does it cost to own a condo in Toronto?

It costs upwards of half a million to own a condo in North York and Toronto. The area you are looking into, the condo itself and the amenities are all influential factors on the price. If you are looking closer to the heart of downtown or in a luxurious neighborhood, don’t be surprised if prices surpass the one million mark.

How does rent to own work in Toronto?

Rent to own works by taking a portion of the rent you pay every month to the landlord or owner. They will put it towards a potential future down payment should you decide to buy the property. However, you will not see that money again if you decide against purchasing the condo down the line. 


With condos in the city at staggering prices in Mississauga, a rent-to-own condo is an excellent solution for those who cannot come up with a down payment or need time to build their credit. Just be sure to seek the counsel of a legal advisor to make sure everything on paper is above board. 

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Tal Shelef
Tal Shelef is a know it all when it comes to pre-construction developments Canada Wide. His years of daily research and growing up on construction sites / seeing development sites grow from the ground up at an early age gave him a passion like no other. He uses his knowledge to educate Condowizard’s clients. Have a conversation with Tal and see how much value one phone call may provide you.

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