Selling a Calgary Property with a Rental Guarantee? Read This First.
On the surface, a rental guarantee sounds like a win: predictable income, no vacancy, and cash flow from day one. But if you’re thinking of selling your Calgary property while a rental guarantee is still ongoing, you need to understand the fine print of the program, or you risk leaving serious money on the table.
Let’s break down what most sellers don’t realize about rental guarantees, tenancy rules, and how to time your sale to avoid costly mistakes.
What Is a Rental Guarantee?
A rental guarantee is a common incentive that was used in Calgary’s pre-construction market from 2020 to 2024 to give investors extra confidence in the Calgary real estate market. The guarantee is leaseback program from the developer where they essentially the rent unit from you after closing. Then they sublease the unit to an actual tenant who moves in.
Great for investors. But it comes with a catch.
Read my guide Rental Guarantee FAQ here to review how they generally work but also confirm the fine print in your contract.
Selling Early? Expect a Break Fee
If you decide to sell the property before the rental guarantee period is over, you’ll usually have to pay a break fee. Most contracts include a clause requiring you to pay 2 to 3 months’ worth of the rental guarantee amount to end the agreement early.
So if your rent is $2,000/month, that’s a potential $4,000–$6,000 fee just to exit so be sure to understand your contract.
You Can’t Just Kick Out the Tenant
Here’s where many sellers get it wrong though—even if the rental guarantee was set up through the developer, and even if the lease was part of a promotion—you’re still bound by Alberta’s tenancy rules (i.e. you cannot terminate the lease early just because you’re selling the property).
That means:
You must sell the unit with the tenant in place
The lease must run its full term (usually 12 months)
The buyer must agree to take over the tenancy
And that leads to a bigger issue…
Tenant in Place = Much Smaller Buyer Pool
Most end users—those people looking to live in the property themselves don’t want to inherit a tenant—they want to live in the unit themselves and they can’t until the tenant’s lease is over.
So when you sell with a tenant in place:
Your buyer pool shrinks to virtually only investors
Your property will take longer to sell
You risk lowball offers due to limited marketability and options
This doesn’t mean you can’t sell—it just means you need to time it right.
How to Time Your Sale for Maximum Value
This is the important part—you can still sell the property with the tenant in the unit but you just need time it properly by listing your property for sale 2–3 months before the lease ends.
This gives you time to:
Ability to deliver the “vacant possession” to the buyer by timing the closing date with the end of the lease period
Show it while the tenant is still there (with proper notice)
Close the sale right after the lease expires
Maximize your cash flow so that you’re not carrying the property empty for several months while it sells
This is the best way to sell most properties with a rental guarantee when buyers want to sell. Yes, you will get slightly less selling a property with a tenant in place but it’s usually not work it to wait for the tenant to be out of the unit before selling it - the difference just isn’t that great. But the difference will be HUGE if you sell a property that you cannot deliver without a tenant.
This method allows both investors and end-users to consider the property—and you avoid paying break fees, or losing value due to tenant complications, or covering all of the costs of an empty unit.
Final Thoughts
Selling a property with a rental guarantee isn’t just about listing it—it’s about understanding how timing, tenancy law, and market perception affect your bottom line. Don’t rush to sell just because the end of your rental guarantee is coming up. Instead, review the lease, check your break fee, and strategically plan your exit.
📞 Book a 1-on-1 consultation with me and I’ll walk you through how to sell your Calgary investment property for maximum value—without costly missteps.
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Kyle Dovigi
The Condo Millionaire
Investor. Strategist. Helping sellers close strong, not sloppy.
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