Toronto’s rental market in 2025 continues to evolve amid shifting tenant preferences and evolving economic conditions. However, one area of particular interest, as it counters other trends in Toronto, is furnished homes for rent. While Toronto’s overall rental market has seen a decline in unfurnished rents, the demand for furnished homes, especially in key urban neighbourhoods, has seen less of a decline, due to their appeal to a diverse tenant base, including corporate clients, international newcomers, and transient professionals.

Market Overview and Current Trends

Recent data from liv.rent’s January 2025 Toronto Rent Report indicates that, on a month-to-month basis, the average rent for furnished one-bedroom units increased by approximately 0.65% compared to a slight decline of 0.59% for unfurnished units. 

Liv.rent’s January 2025 Toronto Rent Report shows that, from December to January, the average rent for furnished one-bedroom units rose by about 0.65%, while rents for unfurnished units dropped by roughly 0.59%. Although this may not seem significant, it is meaningful in a highly competitive market like Toronto.

Even a small rent increase for furnished units signals consistent tenant demand, which can help maintain lower vacancy rates and more predictable occupancy. The premium shows that these units still attract tenants who prioritize convenience and flexibility. Finally, in a market where unfurnished rents are under pressure, the ability to command even a small premium underscores the unique appeal of furnished units. 

Key Drivers Behind the Demand

Several factors are driving the sustained demand for furnished homes in Toronto.

Needs for Flexible Accommodations Solutions

Toronto’s economy, positioned as a financial and tech hub, drives demand for flexible living solutions that cater to a spectrum of rental durations and lifestyle needs. For those requiring immediate occupancy, short-term furnished options offer the hotel-like experience needed. Despite the increasing restrictions on short-term rentals, there is still a demand for these, especially for upscale and niche properties. 

A strong market has also emerged for mid-term arrangements, attracting young professionals, students, and digital nomads who need a stable yet adaptable base while transitioning between projects or locations; the convenience of move-in ready accommodations holds high appeal for these demographics. Even longer-term residents, including corporate executives on extended assignments, increasingly favour options that provide a complete living setup from day one, allowing them to settle in without delay. 

Flexibility and Lifestyle

In a dynamic urban environment like Toronto, flexibility is a prized commodity. Furnished rentals allow tenants to move in quickly without the long-term commitment of buying furniture or investing in a permanent home. This flexibility is particularly appealing to younger professionals and digital nomads who prioritize mobility over long-term settlement.

The primary advantages of furnished homes include immediate readiness, reduced moving costs, and the convenience of having utilities, appliances, and décor already in place. 

Supply Dynamics 

The supply of furnished units remains limited compared to the broader rental market; in Toronto, many properties are traditionally offered unfurnished. Although the initial costs of purchasing quality furniture and décor can be significant, as well as ongoing maintenance and replacement, many investors see this as a worthwhile expense when balanced against the potential for lower vacancy rates and higher tenant retention.

Strategies to Leverage Demand

To ensure demand and make the most of the advantages of offering a furnished property, many property managers are adopting various strategies.

Flexible Lease Terms

By offering both short-term and mid-term leasing options, property managers can effectively cater to a broad spectrum of tenant needs while balancing occupancy with revenue stability. Short-term leases allow for quick turnovers that capture seasonal or transitional demand, making the property available to business travellers or those in between residences. In contrast, mid-term leases provide stability by attracting tenants with longer assignments or projects, thereby reducing vacancy periods. This strategic mix ensures that properties remain occupied throughout the year, optimizing income without locking in tenants for overly rigid terms.

High-Quality Furnishings

Investing in durable, high-quality furniture is key to enhancing the appeal of a furnished property while reducing replacement frequency. Quality furnishings create a welcoming, comfortable atmosphere that attracts reliable tenants and encourages longer stays. Durable items not only stand up to frequent use but also help justify premium rental rates, as tenants are more inclined to choose a property that offers both style and longevity. This focus on quality also minimizes long-term maintenance costs and reinforces the property’s reputation as a well-managed, modern living space.

Professional Property Management

Leveraging specialized property management services enables property managers to streamline operations and maintain high occupancy rates. Professional managers handle critical tasks such as tenant screening, regular maintenance, and targeted marketing, ensuring that properties meet tenant expectations and comply with evolving rental regulations. This hands-on approach not only builds tenant trust and satisfaction but also reduces operational burdens for property owners, allowing them to focus on strategic growth and long-term profitability.

Marco Property Management has a deep understanding of the city’s real estate market, spanning local neighbourhood dynamics, current marketing trends, and more. We help investors maximize the potential of each property. With services that include tenant placement, thorough screening, proactive maintenance, and strategic consulting, Marco is focused on delivering practical solutions designed to optimize return on investment and strengthen investment portfolios. For investors looking to navigate Toronto’s competitive landscape with informed, professional guidance, we provide a well-grounded approach to property success.