Short-Term vs Long-Term Rental Management in Toronto: Which Is Right for You in 2025?

Toronto’s rental market continues to evolve in 2025, offering property owners two primary strategies to generate income: short-term rentals (like Airbnb) and long-term leasing. While both can be profitable, they come with distinct pros, cons, legal considerations, and management demands. This guide compares short-term vs. long-term rental property management in Toronto, helping you choose the best option for your property, goals, and lifestyle.

Understanding Short-Term Rental Management In Toronto

Short-term rentals refer to properties that are rented out for relatively brief periods, typically ranging from a few nights to a few weeks. These types of rentals have gained significant popularity in recent years due to the flexibility and unique experiences they offer travelers. Unlike traditional long-term rentals, which usually involve leases of six months or a year, short-term rentals cater to a diverse array of guests, including vacationers, business travelers, and those in need of temporary housing for various reasons.

Pros	Cons
Higher potential income per night	More frequent maintenance and cleaning
Flexible personal use (you can block off dates for yourself)	Guest communication is time-consuming
Dynamic pricing based on demand	Requires licensing and compliance with strict regulations in Toronto
More control over guest turnover and property condition	Subject to seasonal variation in demand

Understanding Long-Term Rental Management in Toronto

Long-term rentals are generally defined as leases that extend for a duration of 12 months or longer. This type of rental agreement is commonly utilized in residential real estate, where tenants occupy a property as their primary residence. The stability offered by long-term rentals is beneficial not only for tenants but also for landlords. They provide tenants with a stable living arrangement, while offering landlords a reliable source of income. The commitment involved in these leases fosters a sense of community and belonging for tenants, while landlords benefit from reduced turnover and maintenance costs. As the rental landscape continues to evolve, understanding the dynamics of long-term rentals remains crucial for both parties involved.

Pros	Cons
Stable, predictable monthly income	Rental rates are usually lower on a nightly basis
Lower management intensity (fewer turnovers)	Harder to access your property once leased
No need for daily guest interaction or constant marketing	Risk of problematic tenants or eviction processes
Fewer cleaning costs	Less flexibility during lease periods

Legal Considerations In Toronto

Short-Term Rentals in Toronto: Regulated under specific bylaws that have been put in place to ensure a balance between the needs of residents, the tourism industry, and the overall community. As a property owner or manager looking to engage in short-term rental activities, you must adhere to several important regulations to operate legally and responsibly. These requirements include:

• Register your unit with the City of Toronto

• Only rent your principal residence

• Collect and remit the 4% Municipal Accommodation Tax (MAT)

• Follow fire and safety regulations

  
  

Long-Term Rentals in Toronto: While more stable legally, fall under the Residential Tenancies Act, which provides tenant protections and limits the ability to raise rent or evict tenants. This act is designed to create a fair and equitable rental market by ensuring that tenants have rights that protect them from unfair treatment. For instance, landlords are required to follow strict procedures for eviction and must provide valid reasons if they wish to terminate a tenancy. Additionally, there are regulations that limit how much rent can be increased annually, which helps tenants budget and plan for their living expenses without the fear of sudden financial burdens. Overall, while long-term rentals offer a more stable environment for both landlords and tenants, they come with their own set of rules and regulations that must be respected to foster a healthy rental market in Toronto.

Which Option Is More Profitable In 2025?

A well-managed short-term rental in downtown Toronto has the potential to earn 30 to 50% more annually compared to a traditional long-term lease arrangement. This significant increase in revenue is particularly pronounced during peak travel months, such as the summer season and around major holidays, when tourism in the city is at its highest. During these times, the demand for short-term accommodations surges, allowing property owners to capitalize on higher nightly rates. Additionally, the ability to adjust pricing dynamically based on market demand can further enhance profitability. Factors such as local events, festivals, and conventions also contribute to the potential for increased earnings, making short-term rentals an attractive option for savvy investors looking to maximize their income.

On the other hand, long-term rentals provide a level of financial consistency that can be highly appealing for landlords who prefer a stable and predictable income stream. This consistency is especially beneficial for those who are risk-averse or who may not wish to engage in the complexities and challenges associated with frequent guest turnover. With long-term leases, landlords can enjoy the security of guaranteed monthly rent payments, which can greatly simplify financial planning and budgeting. Moreover, the responsibilities associated with managing a short-term rental, such as regular cleaning, maintenance, and the need for ongoing marketing efforts to attract new guests, can be quite demanding. For many property owners, the reduced stress and time commitment that comes with long-term rentals outweigh the potential for higher earnings from short-term rentals, making it a more suitable option for their investment strategy.

Hybrid Rental Strategy

Many landlords are now exploring mid-term rentals (30–90 days) as a flexible alternative to traditional leasing models, or they are creatively combining both short-term and long-term rental strategies seasonally. This approach allows landlords to maximize their property’s potential throughout the year, adapting to the changing demands of the market. For example:

• Use short-term rentals during summer and events: In popular tourist destinations, summer months often bring an influx of visitors seeking temporary accommodations. Landlords can capitalize on this by offering short-term rentals, which typically command higher nightly rates during peak seasons. Events such as festivals, conferences, and holiday celebrations can further increase demand, making it an ideal time to list properties for short stays.

  
  

• Switch to a long-term tenant in winter: As the summer season winds down, many landlords choose to transition their properties to long-term rentals during the winter months. This strategy provides stability and consistent income, as demand for short-term stays usually decreases in colder seasons. By securing a long-term tenant, landlords can reduce vacancy rates and ensure that their properties remain occupied, thus maintaining a steady cash flow throughout the year.

  
  

• Offer furnished mid-term rentals to professionals, digital nomads, or traveling nurses: The rise of remote work and the gig economy has led to an increasing number of professionals seeking mid-term accommodations. Furnished mid-term rentals cater to this demographic, providing a comfortable living space for individuals who may be on temporary assignments or projects. This option is particularly appealing to traveling nurses, consultants, and digital nomads who require flexibility and convenience without the commitment of a long-term lease.

  
  

Property management companies like Keyper Property Management play a crucial role in helping landlords navigate these hybrid strategies with ease. They provide comprehensive services that assist landlords in managing the complexities of transitioning between rental models. This includes handling listing transitions to ensure that properties are marketed effectively across different platforms, ensuring compliance with local regulations and zoning laws, and implementing dynamic pricing strategies to optimize rental income based on market conditions. By leveraging the expertise of property management professionals, landlords can focus on maximizing their investment while minimizing the stress associated with managing multiple rental strategies.

Choose What Aligns With Your Lifestyle

Want passive income with minimal contact?

Go long-term. This approach typically involves leasing your property to tenants for extended periods, often ranging from six months to several years. By opting for long-term rentals, you can enjoy a steady stream of income with less frequent turnover. This means fewer headaches related to tenant screening, property maintenance, and cleaning between guests. Additionally, long-term tenants tend to treat the property as their own, leading to less wear and tear. This method can be particularly appealing for those who prefer a hands-off investment strategy, allowing you to focus on other aspects of your life while still generating income.

Want to maximize revenue and keep personal use of the property?

Go short-term. Short-term rentals, such as those listed on platforms like Airbnb or Vrbo, can provide higher nightly rates and greater flexibility regarding when you can use your property. This option is ideal for those who want to enjoy the benefits of personal usage while still capitalizing on the lucrative vacation rental market. However, it's important to note that this approach often requires more active management, including frequent cleaning, guest communications, and marketing efforts to maintain high occupancy rates. If you are willing to invest the time and effort, short-term rentals can be a rewarding way to generate significant income while retaining the ability to use the property for your own enjoyment.

Want flexibility and efficiency?

Hire a professional property manager to guide you. Engaging the services of a property management firm can save you time and alleviate the stress associated with managing rental properties. A professional property manager can handle everything from tenant screening and lease agreements to maintenance requests and rent collection, allowing you to enjoy the benefits of rental income without the day-to-day responsibilities. This is especially beneficial if you own multiple properties or live far from your rental units. With their expertise, property managers can also help you navigate local regulations, optimize rental pricing, and improve tenant retention, ensuring that your investment remains profitable and well-maintained.