Every occupied unit raises the same question once a year: increase the sitting tenant to the maximum you are allowed, or let the tenancy end and re-rent at market. The useful version of that question is arithmetic, and it runs on four numbers you already have.
First, check whether a turnover would raise the rent at all
In most of Canada, rent regulation binds the tenancy rather than the unit. Ontario states it directly: the guideline does not apply to a rental unit on turnover of a tenancy, meaning a case where the landlord and the new tenant agree on the rent amount. The guideline is 2.1 per cent for 2026 and 1.9 per cent for 2027, and neither figure binds the first rent of a new tenancy.
British Columbia is built the same way. The annual limit, 2.3 per cent for 2026 and 2.2 per cent for 2027, governs increases during a tenancy, while the province describes the opening rent as something the landlord and tenant negotiate before the tenancy begins. A private member's bill, Bill M 218, sits at first reading and would cap the rent on a vacated unit at what the previous tenancy would have allowed. It is not law. If your BC plan rests entirely on the turnover reset, that is worth watching.
Manitoba breaks the calculation outright. In a complex of four or more units, the rent you charge a new tenant cannot exceed the average rent for similar units in the same complex, and you have to give that tenant a Notice to New Tenant form and file a copy with the Residential Tenancies Branch within 14 days. In a complex of three units or less, you set the increase. So in a Manitoba fourplex, your own building caps the turnover, and the gap this exercise measures may not exist.
Ontario has a carve-out running the other way. Units first occupied for residential purposes after November 15, 2018 sit outside the guideline, so the renewal itself is negotiable and there is less to gain by waiting for a vacancy.
You do not pick the turnover, so price the retention
A fixed term ending is not a move-out date. In Ontario and British Columbia the tenancy rolls on month to month when the term expires, so you cannot end it to re-rent at a higher price. The turnover happens when the tenant decides it happens.
What you control is how hard you work to keep them: an increase below the guideline, a repair you have been deferring, an appliance, a parking spot. The four numbers below convert into a retention budget, which is the most that spending is worth. A negative budget means let them go.
The four numbers
- The monthly gap. Achievable market rent minus the rent after a capped increase. Achievable means what comparable units near you signed at in the last few months, not what they are asking.
- Days vacant. The days between the last day the old tenancy owes rent and the first day the new one does. Only that interval converts into lost rent, and it is not the same as days on market.
- Turnover cost. Paint, cleaning, repairs beyond ordinary wear, locks, photography, any leasing commission, utilities you carry while the unit sits empty, and your own hours priced at what you would pay someone else.
- The capped renewal. Current rent times the guideline, over twelve months. This is the income you keep by doing nothing.
Work it through
Take a unit renting at $1,800 with a 1.9 per cent increase available, which puts the renewed rent at $1,834. Say comparable units are signing at $2,050. The monthly gap is $216.
Now price the route to it. Six weeks empty at the old rent is about $2,490 of rent you never collect. Add $2,400 of turnaround work. The turnover costs roughly $4,890.
Divide $4,890 by $216 and you get about 23 months. The new tenancy has to run close to two years before the higher rent has paid for the vacancy that produced it. If you expect four or five years from the next tenant, the turnover is worth having. If your building turns over every year, it is not, and almost anything up to $4,890 spent on keeping this tenant is the cheaper move.
Three things the arithmetic misses
- The gap compounds while you renew. Each capped increase applies to a base that is already behind the market, so a tenancy eight years old carries a far wider gap than a tenancy two years old. The case for letting a long tenancy end strengthens every year you do not.
- A sitting tenant is a payment record you have already watched. You have seen this person pay rent for years. An applicant is a credit report and two reference calls. That difference is worth real money, and it is worth more on one unit than across a hundred.
- Long tenancies cost more to turn. The $2,400 above assumes ordinary wear. A unit held for a decade often needs flooring, a full repaint and appliances, which can double the turnover cost and push the break-even past the length of the next lease.
Run it before the notice deadline
The calculation is worth nothing once the clock has run. Ontario requires at least 90 days of written notice before an increase takes effect, with at least 12 months since the last one, and a late notice costs you the year. British Columbia requires three full months of notice and the same 12-month spacing. Manitoba also requires three months.
Work backwards from that. Decide in month nine of a twelve month term and serve in month ten, and your retention conversation still lands ahead of the tenant's own decision about staying. Leave it to month eleven and you are negotiating with someone who has already looked at other units.
Quebec sits outside all of this. A new tenant there has to be told the lowest rent paid in the previous twelve months and can apply to have the rent fixed, which puts the turnover reset in the tenant's hands rather than yours.