The True Cost of Owning a Rental Property

Greenell Properties Capital
Sep 8
2 min read

Owning a rental property seems like a simple equation: rent minus mortgage equals profit, right? Not quite.

In reality, rental ownership comes with several hidden and not-so-hidden costs that can catch investors off guard if they aren’t prepared. In this blog, we break down the true costs of owning rental real estate in Canada—so your pro forma matches reality.

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1. Repairs & Maintenance (5–10% of Rent)

Every property needs upkeep. Expect to spend 5–10% of gross rent on things like:

Leaky faucets, broken appliances
Lawn care, snow removal
Minor wear-and-tear repairs

Tip: Preventative maintenance saves more than emergency fixes. Budget monthly, even if you don’t spend it every month.

2. Capital Expenditures (CapEx)

These are large, infrequent expenses like:

Roof replacement ($10K–$20K)
Furnace or HVAC ($5K+)
Windows, foundation, plumbing issues

Budgeting tip: Set aside $200–$300/month per unit into a CapEx reserve. You’ll thank yourself in 3 years.

3. Property Management (8–10% of Rent)

If you’re not managing the property yourself, expect to pay a monthly fee, plus extras like:

Leasing fees (typically half a month’s rent)
Renewal fees
Maintenance coordination charges

Investor tip: A great manager is worth the cost—especially if you’re scaling or investing out of province.

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4. Vacancy & Turnover

Plan for at least one vacant month per year per unit. Add in:

Cleaning
Paint or minor touch-ups
Listing fees and showings

Vacancy hurts cash flow—budget for it upfront.

5. Insurance & Property Taxes

Landlord insurance policies cost more than homeowner policies. Also, some provinces (like Ontario) are seeing sharp increases in property taxes.

Tip: Call insurers and municipalities ahead of closing to estimate your monthly carrying costs accurately.

6. Professional Services

You may need:

An accountant (especially if incorporated)
A real estate lawyer (for leases, evictions, or disputes)
Bookkeeping software or payroll if you scale

Final Thoughts

Owning rental property is one of the most powerful wealth-building tools available—but only if you know what you’re getting into. By budgeting realistically for the full range of expenses, you can protect your cash flow, avoid surprises, and create a portfolio that performs in good markets and bad.