Renting Rather Than Selling the Family Home When Moving to a Residence

Last updated: June 16, 2026

When a loved one is about to move into a senior residence in Greater Montreal, the family home becomes a big question. Should you sell it, or keep it and rent it out? Many families hesitate: the home is at once a cherished memory, a significant asset and, sometimes, a potential source of income. Renting rather than selling is a legitimate option, but it turns your loved one (or you) into a landlord, with very real responsibilities.

This page walks through the decision: why some families choose to rent, what that involves day to day, the key tax questions to confirm with a professional, and how to decide based on the cash flow needed to pay for the residence each month.

Why some families rent instead of selling

Keeping the home and renting it out usually reflects several motivations at once. There is no single right answer: it depends on the financial, emotional and family situation.

• Keeping an asset: the home stays in the family estate, which reassures those who don't want to part with something built over a lifetime.
• A monthly income: the rent can help cover part of the cost of the residence, a topic we cover in the monthly residence budget.
• Indecision: after a draining move, many prefer not to decide right away and give themselves time to think.
• Market timing: if the real estate market looks unfavourable, some wait before listing.
• A possible return: in rare cases, the family doesn't rule out the loved one coming back, for instance after a short stay or convalescence.

These reasons are valid, but they must be weighed against the obligations that come with being a landlord.

Becoming a landlord: the responsibilities

Renting out a home isn't just about collecting rent. In Quebec, the residential lease sets out everyone's rights and obligations, and the Administrative Housing Tribunal (Tribunal administratif du logement) can be called on in case of a dispute. The owner must, among other things:

• Maintain the dwelling: repairs, roof, plumbing, heating, compliance and safety remain their responsibility.
• Manage the tenant relationship: signing the lease, inspections, communications, renewals and sometimes delicate situations.
• Handle the unexpected: a water leak, a broken appliance or a late-paying tenant won't wait for a convenient time.
• Keep up insurance and charges: municipal and school taxes, home insurance suited to a rental, and exterior upkeep.

For an older person who has just moved into a residence, or for relatives already stretched thin, this burden can become heavy. It's a factor not to underestimate in the decision.

Taxes and the principal residence: confirm before acting

Taxes are the most important aspect to clarify before signing anything. A few general principles are worth knowing, but they should always be confirmed by a professional.

• Rental income is taxable: rent collected must be reported, and certain expenses related to the rental can generally be taken into account.
• The principal-residence exemption: turning a principal residence into a rental property may, over time, affect eligibility for this exemption when the home is eventually sold.
• Change of use: going from a lived-in home to a rented one is a change of use that can carry tax consequences.

We can't give you figures or specific rules here, because every situation is unique and the rules change. The right step is to discuss it with a notary and an accountant or tax specialist before renting, to avoid unpleasant surprises. This fits naturally into planning your choice of residence based on autonomy and budget.

The management burden and the property manager

If renting appeals to you but the management worries you, a property manager (or a rental management agency) can handle the day-to-day for you. In practice, they can:

• Find and screen the tenant: listings, viewings, checks, lease signing.
• Collect the rent and follow up on late payments.
• Coordinate maintenance and repairs with tradespeople.
• Act as an intermediary with the tenant and, if needed, before the Administrative Housing Tribunal.

This service comes at a cost that reduces net rental income, but it lifts a considerable mental load, especially for a family already managing a loved one's adjustment to a new residence. Weigh it against the other funding options described in financial assistance for a residence.

Deciding based on your cash-flow needs

Ultimately, the decision comes down to one question: do you need the home's capital now, or a steady income over time? Here are the two opposing logics.

• Renting works better when your current cash flow already covers the cost of the residence and you want to keep the asset while generating some extra income.
• Selling is often preferable when you need the capital to pay for the residence, to simplify management, or to avoid rental risk. That's the scenario we detail in selling the family home to fund the residence.

It's also useful to compare overall costs: our comparison of the cost of a residence versus staying at home helps clarify the amount you really need each month. Once you know that figure, you'll know whether the rent is enough or whether selling makes more sense.

Frequently asked questions

Is renting out the family home a good idea when a loved one moves into a residence?

It can be, if your current cash flow already covers the cost of the residence and you want to keep the asset while earning income. It's less advisable if you need the capital right away or if managing a rental is a burden that's hard to take on. The answer truly depends on your situation.

Is rental income taxable?

Yes, rent collected is taxable income that must be reported. Certain expenses related to the rental can generally be considered. Because the rules are specific and change over time, it's essential to discuss this with an accountant or tax specialist before you rent.

Does renting out the home change anything for the principal-residence exemption?

Turning a principal residence into a rental property may, over time, affect eligibility for the principal-residence exemption on a future sale. The rules around change of use are technical, so we recommend consulting a notary and a tax specialist before making your decision.

Do you have to manage the rental yourself?

No. You can entrust the rental to a property manager who finds the tenant, collects the rent and coordinates maintenance. This service has a cost that reduces net income, but it greatly eases the burden, especially during a loved one's transition to a new residence.