With Canadian rent prices still among the highest in the world—averaging over $2,100/month nationally in 2025—many renters are seeking creative ways to reduce housing costs without compromising on location or quality of life. One increasingly popular solution is room-sharing or renting private rooms within a shared home. This approach enables tenants to access more affordable housing, while landlords can increase their income and reduce vacancy risk. Recent Statistics Canada data shows that roommate households have grown by 54% since 2001, making them one of the fastest-rising household types in the country. In this blog, we’ll explore the latest room-sharing trends in Ontario, the pros and cons for both tenants and landlords, and the insurance considerations you need to know.
Rising Canadian Rent Costs Driving Room-Sharing Trend
Renters are finally catching a break: as of July 2025, national asking rents average $2,121, marking a 3.6% yearly decline—the tenth consecutive month of decreases—yet remain 2% above levels from two years ago and 11% above those from 2022.
Average Rent Prices in Ontario: 2025 Snapshot
- For Ontario overall (August 2025):
- Studios: ~$1,546/month
- One-bedroom: ~$1,892/month
- Two-bedroom: ~$2,285/month
- Three-bedroom: ~$2,686/month
- In Toronto specifically, one-bedroom rents recently dipped: an unfurnished one-bedroom averaged $2,071 in August, up slightly from July.
- Nationally, the average rent in Canada stands at $1,778/month, down 0.8% year-over-year.
As a result, renting in Toronto is tough. Increasingly, low- and middle-income earners are being forced out of Toronto and the GTA. Consequently, they face longer commutes and displacement from the communities they have long called home. Many have had to consider sharing the spaces they live in with strangers as a way to stay close to work, school, and family. There are a couple of rental options that have been gaining momentum lately: multi-tenant houses (also known as room sharing) and single-room rentals.
What Is a Multi-Tenant or Rooming House?
A multi-tenant house, commonly referred to as a rooming house, is a building where four or more people rent rooms and share a kitchen and/or washroom. These setups remain a key affordable housing option, particularly for students, newcomers, seniors, and moderate-income residents
New Toronto Regulations for Multi-Tenant Houses
While Ontario’s Residential Tenancies Act (RTA) continues governing rental regulations, rent control no longer applies to units first occupied after November 15, 2018. Toronto has recently emphasized compliance through zoning and licensing requirements to legitimize and ensure safety standards in rooming houses
Single Room Rentals: Affordable Alternative in a Tight Market
Sharing rooms remains an effective strategy for affordability. In March 2025, roommate households—defined as two or more unrelated individuals sharing a dwelling—grew by 54% from 2001 to 2021, though they represented just 4% of all households in 2021.
With the advent of Airbnb, the landscape of renting has been forever changed. The ability to rent vacation properties in others’ homes gave inspiration to the creation of a service that aims to do for roommate seekers what Airbnb does for vacation rentals. Sparrow is a rental site designed to help people looking for a home to share. The website has received $500,000 in funding from the federal government to help with Canada’s current housing shortage. According to the site’s creators, the idea for the service was born out of the pandemic. In their view, it created two parallel crises—housing affordability and loneliness. Their home-sharing platform and community are looking to reimagine how we use and share our housing space—enter room sharing.
The site claims to help renters find homes and apartments at more budget-friendly prices. The average rent is about $750/month, depending on the house and location. The website also does credit and background checks and tries to match people based on compatibility. Sparrow advertises their service as, “…opportunities to reduce housing costs, build social connections, and increase quality of life for Canadians.”
Why Millennials Are Choosing Room-Sharing Over Traditional Rentals
If you own a rental property, it makes sense to rent it out as a whole to one person or a single family. As a property owner, consider renting by the room instead. Whether you live in the home or it’s simply an investment property, there are numerous benefits to renting a single-family home or another unit to multiple tenants. Renting out single-family homes, condominiums, or apartments to a single tenant is the norm. However, you may feel as though you’re not making enough money. Many are considering renting by the room rather than renting out the property as a whole to boost their bottom line.
Many renters—especially millennials—turn to room-sharing to stay financially flexible and maintain community ties. Shared living enables cost savings that can help with student debt, car purchases, or saving for homeownership. Moreover, enrolling tenants room by room minimizes revenue loss during vacancies.
In Ontario, it is legal to rent out a room in your home. However, the income earned from room sharing outside your home still needs to be reported as income. Rent that you receive should be reported for the year in which you receive it, even if the rental period spans a different year.
Benefits of Renting Out a Room in Your Home
This type of living arrangement is popular among millennials because it allows them to have extra disposable income each month. Many are using their savings for other purposes, such as paying down college debt, buying a new car, or saving for a down payment on a home of their own. In many parts of the country, you can rent out most individual rooms for several hundred dollars a month. The average rent for a one-bedroom apartment in Ontario increased by 16.9% YoY to $2,180 for April 2023. Lining up a tenant the month after the old one moves out doesn’t always work out. The advantage of renting rooms is that while you have a vacancy in an apartment, the other rooms may still be filled, thereby lowering the financial impact.
As a landlord of several single-room units, you can receive more rental income. For example, your three-bedroom rental home, which rents out to one family for an average of $2,402, can bring in $2,800 each month if rented to three different tenants instead. Renting by the room also helps make rental income more reliable for landlords because it minimizes the effects associated with having vacancies.
Risks and Challenges of Single Room Rentals
Renting individual rooms gives you access to multiple tenants, which means various rent checks. Although it can be a great financial strategy, renting by the room does come with a few complications:
- Despite the increase in rental revenue, you may want to consider the possibility of high tenant turnover. You may have to replace multiple tenants every three to six months.
- More tenants may lead to more calls about noise, damage, and other complaints.
- Additional work needed to manage several tenants—not to mention the potential for conflict and drama.
- It’s also important to keep in mind that renting to more people will ultimately mean dealing with more damage and possibly more evictions.
- Rental income is taxable.
- You may also need to consider additional expenses, including heating, electricity, and water, which become more challenging to calculate usage with multiple tenants.
- Your renter refuses to leave.
Most home insurance policies don’t cover damage or loss caused by renters staying in the home. They need to protect themselves and their belongings with their own renters’ or tenants’ insurance policy. The Ontario Residential Tenancies Act doesn’t require tenant insurance. However, you do have the right to insist on seeing that they are insured as one of the lease conditions.
As Canada’s rental market gradually cools, the appeal of room-sharing is stronger than ever. Falling rents offer respite, but affordability pressures still propel many—especially young professionals and newcomers—toward shared living arrangements. For landlords, renting by the room can mean greener income margins and reduced vacancy risk—but it comes with added operational and insurance responsibilities. Whether you’re renting or leasing, understanding the local rental landscape and securing proper coverage are vital steps. At isure, we’re here to guide you through tailored insurance solutions that align with evolving rental realities and ensure both peace of mind and financial confidence.
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