New Condos Rental Guarantee

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Condo Rental Guarantees Sound Good, But Are They Really?

So you invest in a new condo and the developer says that they will guarantee you get a set amount each month; in other words, they say you will receive rent on a monthly basis, regardless of whether or not your condo is filled with tenants or whether or not they pay rent that month. This sounds great, right? Well, of course it does! But is it all too good to be true? Let’s take a look at how condo rental guarantees work, along with their potential benefits and disadvantages, so that you will have all the information you need to make the right decision.

How Do Condo Rental Guarantees Work?

Rental guarantees are most often a way for condo developers to build interest in their new project and find investors. This means that either the developer is directly paying the investor each month, or that they are contributing any additional funds needed should the tenant’s rent fall short of the guaranteed amount. With receiving a set amount each month of guaranteed rental income, it seems like that there is nothing to lose, but that is not always the case.

The Positive Side of Condo Rental Guarantees

  • You Know Exactly how Much You’re Getting Every Month with Condo Rental Guarantees

If you do decide to go ahead and invest in a condo with rental guarantees, you don’t need to worry about falling short if a tenant decides to not pay rent or chooses to end their lease early. When you know that you are guaranteed a certain amount every month, you can plan ahead accordingly and not have to worry about all of possible “what ifs” that many other landlords have to deal with.

  • Condo Rental Guarantees can Help Make Your Investment More Affordable

Mortgages can be extremely pricy when it comes to condos in the GTA and they turn a lot of investors away. If you know you’ll be able to afford each month’s mortgage payment, however, because you have a rental guarantee, it makes the decision of whether or not you should buy the condo a much easier and relaxing one.

The Negative Side of Condo Rental Guarantees

  • You May Be Getting Less Money Than Your Condo is Worth

Why would you settle for $2,500 per month for your unit when you could be getting $3,000 or more for it? Having a guaranteed set amount is reassuring, but it could be holding you back. And guess what! If your developer only promises you $2,500 per month, they get to keep the extra $500 that they’ve convinced the tenant to pay for rent. If you want to get all the money that you deserve, maybe condo rental guarantees aren’t for you.

  • Condo Rental Guarantees Eventually End

Your guaranteed rental income won’t last forever. Some agreements are only for a few months – and some may even last a few years – but once it is over, you will need to rent out the condo on your own or hire property managers to continue to do it for you. Many condo investors, especially first-time investors, are often not prepared for this and end up losing money. You should only accept a condo rental guarantee if you are confident that you will be able to do it on your own once the term period has expired.

Need More Info on Condo Rental Guarantees in Ontario?

If you have any questions about condo rental guarantees, or would like to start looking to invest in a place that offers condo rental guarantees, we should have a chat! With my experience and knowledge, you can put your trust in me to help you find the right deal. Call 647-519-5751 or send me an e-mail at to start your search with me today

If you would like to discuss more the upcoming condo opportunities and have any questions, please book an appointment with Arshad Hussain. A trusted name in Toronto pre-construction real estate.