With the cost of living rising across Toronto, more families are looking for creative ways to make homeownership work for them. One increasingly common question is: Should we rent our family home – or part of it – while continuing to live there ourselves?
For many, the idea of renting a basement suite or separate floor sounds appealing. It can help offset mortgage costs, fund renovations, or create a financial cushion while your family enjoys the lifestyle you’ve built.
But before you decide to rent your family home, it’s important to understand the financial, practical, and emotional impact of sharing your property. This guide walks through what families should consider – from zoning and taxes to privacy and family dynamics – before you rent your family home to tenants.
Why Families Are Choosing to Rent Part of Their Home
Toronto’s housing market has made multigenerational and shared living arrangements more common than ever. For families already settled in established neighbourhoods like East York or Danforth Village, renting part of the family home can make financial sense.
A well-designed basement apartment or self-contained suite can:
- Provide steady monthly income.
- Help manage mortgage or childcare costs.
- Offer flexibility for aging parents or older kids down the line.
It’s a way to stay rooted in the community you love while easing financial pressure – but it also changes how your household functions.
Understanding What It Means to Rent Your Family Home
When you rent your family home, you become a live-in landlord, which brings both benefits and responsibilities. You’re managing your property, maintaining compliance with the Residential Tenancies Act, and providing tenants with safe, private living space – all while raising your family upstairs.
Before you rent your family home (or part of it), ask yourself:
- Is your space legal and up to code for rental use?
- Do you understand your obligations as a landlord?
- Is your family ready for the lifestyle change that comes with shared property living?
Legal and Safety Requirements
Not every basement or in-law suite in Toronto qualifies as a legal rental unit. The City of Toronto has specific requirements for what’s known as a secondary suite.
According to the City of Toronto’s guide to secondary suites, a legal rental unit must include:
- A separate entrance (or a properly fire-rated shared entrance).
- Adequate ceiling height.
- Fire separation and proper exits.
- Functional plumbing, heating, and ventilation.
Homeowners may also need to obtain building permits or inspections before tenants move in. Renting an unregistered or non-compliant unit can lead to fines or legal issues – so ensuring your suite meets safety standards is a critical first step.
It’s also important to use the Ontario Standard Lease form, available through ontario.ca, to protect both you and your tenant.
Financial Benefits – and What to Plan For
There’s no question that renting your family home can create welcome financial relief. The extra income might help your family save for future goals, pay down the mortgage faster, or cover new expenses like kids’ extracurricular activities or home improvements.
But it’s not as simple as collecting rent. Here’s what to plan for:
1. Income Reporting
The Canada Revenue Agency (CRA) requires that all rental income – even from part of your home – be reported. The CRA’s rental income guide explains how to claim related expenses, like a portion of utilities, insurance, or repairs.
2. Insurance Coverage
Standard homeowner policies may not automatically cover tenant-related damage or liability. Talk to your insurance provider before you rent your family home to ensure proper protection for both your space and your tenant’s.
3. Maintenance and Upkeep
Even minor repairs – a leaky tap or power outage – become your responsibility. If your family’s schedule is already full, factor in the time and cost of maintaining two living spaces.
The Family Side of Becoming a Landlord
This is where practicality meets family dynamics. Renting your basement isn’t just a financial decision – it’s a lifestyle one.
Families often discover that sharing their home changes daily rhythms in unexpected ways. Kids may need to be quieter during certain hours, backyard spaces become shared, and privacy feels different with someone living below.
For parents, that can mean managing noise levels or setting new household rules. For kids, it can be an opportunity to learn respect and boundaries.
Our Complete Family Guide to Selling with Kids explores how communication and consistency help families navigate change – and the same principles apply when renting part of your home. Setting expectations early makes the transition smoother for everyone under one roof.
Setting Boundaries and Protecting Privacy
A successful live-in rental depends on clear boundaries. Here are a few ways families maintain privacy and harmony:
- Separate Entrances: If possible, provide tenants their own entry to minimize overlap.
- Soundproofing: Adding insulation between floors helps reduce everyday noise transfer.
- Defined Spaces: Keep storage and laundry areas divided to prevent tension.
- Communication: Establish a respectful, professional tone from day one – you’re both sharing space, but this is still a business arrangement.
Families who rent their family home while continuing to live there often say the key is to treat the arrangement with structure and consistency, much like any other household routine.
Zoning and Property Value Considerations
Before you make physical changes to your home, confirm that your neighbourhood allows secondary suites. The City of Toronto provides zoning details through its Interactive Zoning By-law Map.
In areas like Clanton Park, finished basements with separate entrances are highly desirable, but property-specific restrictions may still apply.
It’s also worth noting that legal secondary units can increase resale value if designed well and properly permitted – an advantage when it’s time to move into your next family home.
Lifestyle Impact: The Realities of Shared Living
While you rent your family home – it offers financial benefits, it can also reshape your family’s lifestyle.
Weekends may feel busier with another household coming and going. You might need to coordinate snow removal, garbage schedules, or driveway space. If your family enjoys hosting gatherings, you’ll have to balance that with your tenant’s right to quiet enjoyment.
For some families, that trade-off is worth it – especially if the financial relief supports larger goals like upsizing or paying for postsecondary education. For others, the ongoing adjustment proves stressful.
If you’re uncertain, consider a short-term or fixed lease to test how the arrangement feels before committing long term.
When Renting Part of Your Home Makes Sense
Renting your basement or suite can be a smart strategy when:
- Your space already meets legal requirements.
- Your family is comfortable sharing the property.
- You have time to manage maintenance and tenant relationships.
- The additional income aligns with your financial plan.
It can also be a bridge to bigger goals – helping families build equity faster before moving to their next home.
However, if your home requires costly upgrades to meet standards or if privacy is a major concern, it may make more sense to explore alternative financial strategies or downsizing options.
Bringing It All Together
When you rent your family home in Toronto, it can be a rewarding way to ease financial strain and maximize the value of your property – but it’s not without its challenges.
Families who thrive with a rental suite treat it like a business: they follow the rules, stay organized, and communicate clearly while maintaining respect for both spaces.
Before making the leap to rent your family home, weigh the financial benefits against lifestyle changes, privacy, and the time commitment required. A Zoning By-law Map. can help you make an informed decision that supports your family’s long-term goals.
Because at the end of the day, your home is more than an investment – it’s where your family’s story unfolds.
