Short-Term Rental or Long-Term Lease in Toronto? How GTA Owners Should Decide in 2026

The short answer: In the City of Toronto, you can only run a short-term rental (under 28 nights) in your principal residence, and you can rent out the entire home for at most 180 nights a year. For an investment property in Toronto, the real choice is a long-term lease or a furnished mid-term rental of 28 days or more. Outside Toronto, in much of the GTA and in cottage country, a well-run short-term rental can still earn more than a lease. Rules vary by municipality, and so does the extra work.

We've managed short-term rentals across the GTA for eight years and hosted more than 18,000 guests. Owners ask us the same question every week: should I put my property on Airbnb, or should I just lease it? Here is how we'd think it through.

Start with the rules, not the revenue

Most "Airbnb vs long-term rental" articles start with income. In Toronto, that's the wrong place to start, because the bylaw decides most of it for you.

Toronto defines a short-term rental as all or part of a home rented for less than 28 consecutive days. You can only do it in your principal residence, the place you actually live. Here's what that means in practice:

• You live there and travel often: You can rent the entire home while you're away, up to 180 nights a year. You can rent spare rooms with no night cap.
• It's a second property or an investment unit in Toronto: It can't legally be a short-term rental. Your options are a long-term lease or a mid-term furnished rental of 28 days or more.
• It's a condo: Your building's bylaws and declaration can ban short-term rentals even where the city allows them. Check before you list.

Toronto hosts must register with the city, display their registration number on every listing and charge Municipal Accommodation Tax, currently 6%. We cover the details in our guides to Toronto Airbnb rules and Airbnb in Toronto condos.

Editor note: all 13 internal links point to live posts on oakwoodbnb.ca. The internal link map at the end of this doc lists each one.

The case for a long-term lease

A long-term lease gives you predictable monthly income and very little day-to-day work. For many owners, that's the right trade.

What works in its favour:

• Steady cash flow. One rent payment a month, with no seasonality and no nightly pricing to manage.
• Low effort. No cleanings, no guest messages, no restocking.
• Lower setup cost. No furniture, linens, photography or listing setup.
• No short-term rental licensing. You don't need a registration, MAT or platform fees.

What owners underestimate:

• Rents are softening. GTA condo rents fell in the second quarter of 2026. TRREB reported an average one-bedroom at $2,273 (down 2.3% year over year) and a two-bedroom at $3,013 (down 1.7%).
• Rent increases are capped for many units. Ontario's guideline is 2.1% for 2026 and 1.9% for 2027. Units first occupied after November 15, 2018 are exempt, but older units are locked to the guideline for as long as the tenant stays.
• Tenancies are hard to end. Under Ontario's Residential Tenancies Act, a lease rolls into a month-to-month tenancy, and you can only end it for specific legal reasons. If a tenant stops paying, the Landlord and Tenant Board process can take months.
• You lose flexibility. You can't use the property yourself, and selling or moving back in requires notice and, often, compensation.

A lease suits owners who want hands-off income, own an older unit in a strong rental area, or simply can't run a short-term rental where they are.

The case for a short-term rental

Where it's allowed, a short-term rental can earn more than a lease. It also gives you control a tenancy never will.

What works in its favour:

• Higher income potential. You price by the night, so weekends, holidays, events and summer peaks lift what you earn.
• Flexibility. You can block dates for your own use, adjust pricing any time and change strategy without a tenancy to unwind.
• No long-term tenant risk. Guests leave at checkout. There's no rent-control lock and no Landlord and Tenant Board.
• The property stays in better shape. Professional cleaning and inspection after every stay catch small problems early.

What owners underestimate:

• It's an operating business. Pricing, guest messages, cleanings, maintenance, reviews and compliance all run every day.
• Income varies. Occupancy moves with seasons, events and platform ranking. One bad month or one weak review shows up fast.
• Higher costs. Furnishing, platform fees, cleaning, supplies, utilities, insurance, and MAT where it applies.
• Rules can change. Municipalities across Ontario keep revising short-term rental bylaws, so compliance is never set-and-forget.

The middle option most owners miss: mid-term rentals

A furnished rental of 28 days or more falls outside Toronto's short-term rental bylaw. That opens a third path for owners who can't, or don't want to, run nightly stays.

Mid-term guests include travelling nurses, corporate relocations, film and TV crews, people renovating their own homes and families between moves. You get more flexibility than a 12-month lease, and usually higher rent than an unfurnished unit, with far less turnover than nightly stays. Stays of 28 days or more can still create a tenancy under Ontario law, so set them up carefully, ideally with legal advice.

Outside the City of Toronto, the picture changes

Vaughan, Richmond Hill, Oakville, Brampton and other GTA municipalities each set their own short-term rental rules. Some require licensing or a principal residence; others are less restrictive. Cottage markets like Wasaga Beach, Innisfil and Harcourt have their own bylaws and strong seasonal demand.

This is where short-term rentals often make the most financial sense. A detached home that sleeps eight or more can earn well above a lease from group stays, family reunions and seasonal travel, as long as it's run properly and parties are kept out. Always check your municipality's current bylaw before you decide.

How to decide: five questions to ask yourself

1. Is a short-term rental legal at this address? In Toronto, only in your principal residence. Elsewhere, check your city's bylaw and, for condos, your building's rules. If the answer is no, choose between a lease and a mid-term rental.
2. What kind of property is it? Detached homes with space for groups, and homes in cottage or travel areas, tend to earn the strongest short-term income. Small units in areas with steady rental demand often do well as leases.
3. How much income variation can you carry? If you need the same amount every month for a mortgage, a lease or mid-term rental is easier to plan around.
4. Do you want to use the property yourself? If you want weekends at the cottage or a place for visiting family, only a short-term setup gives you that.
5. How hands-on do you want to be? Self-managing a short-term rental is close to a part-time job. If you don't want that, budget for a property manager or co-host before comparing income.

Where Oakwood BnB fits

Oakwood BnB is a Toronto-based short-term rental management company specializing in entire-home and detached properties across the GTA and Ontario cottage country. We manage more than 50 homes, every one of them holds Superhost status, and 80% are Guest Favourites.

We work as your co-host: the listing stays in your name, and we run pricing, guest communication, screening, cleaning, maintenance and compliance. If you're not on Airbnb yet, we guide you through setup and connect you with trusted licensing, registration, legal and accounting experts.

Not sure which model suits your property? Request a free revenue assessment and we'll tell you honestly whether a short-term rental makes sense, including when it doesn't.

Frequently asked questions

Is Airbnb more profitable than a long-term rental in Toronto?

It can be, but only where it's legal. In the City of Toronto, short-term rentals are limited to your principal residence, with the entire home capped at 180 nights a year. For investment properties, compare a long-term lease with a furnished mid-term rental of 28 days or more.

Can I Airbnb my investment property in Toronto?

No, not as a short-term rental under 28 nights. Toronto only allows short-term rentals in the operator's principal residence. You can rent an investment property on a lease or as a furnished mid-term rental of 28 days or more.

What is a mid-term rental in Ontario?

A mid-term rental is a furnished rental of roughly one to several months. In Toronto, stays of 28 consecutive days or more fall outside the short-term rental bylaw. Common guests include travelling professionals, corporate relocations and families between homes.

Is rent control a reason to choose a short-term rental?

It's one factor. Ontario's rent increase guideline is 2.1% for 2026 and 1.9% for 2027 for units first occupied before November 16, 2018. Newer units are exempt from the guideline, but tenancies are still hard to end.

Which GTA properties work best as short-term rentals?

Detached homes with room for groups, homes near attractions or events, and cottage properties in places like Wasaga Beach, Innisfil and Harcourt tend to perform best. Results depend on local rules, pricing and how well the home is managed.

Should I hire a property manager for a short-term rental?

If you don't want to handle daily guest messages, cleanings, pricing and compliance, a manager or co-host usually pays for itself through better occupancy, rates and reviews. Compare what each fee includes, not just the headline percentage.

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