So, you have a rental property, well located in the city or in the countryside that looks and feels good and would appeal to tourists and other short-term tenants?
The choice between long term lease of one year, or a short term lease of days or weeks is not a simple one. Back it 2018 landlords were making money listing their properties on popular home sharing sites like AIRBNB. It was a great time for Real-estate Investors to double sometimes triple their monthly income on a property with minimal risk.
Tourism in Toronto was growing at record speeds, and everyone was cashing in on the AIRBNB play. Oh what a time that was, but a lot has changed since then.
The push back started with hotel lobby groups spending millions lobbying local governments to level the playing field and condo boards filing complaints from residents about disruptions and compromised security. These challenges were not too difficult to overcome.
However, this all came to a screeching halt when the City of Toronto decided to implement tighter controls on Short Term Rentals (Rentals under 28 days) — a 4% Tax, $50 registration fee that seems reasonable. But now the new rules also stated that you could only rent out your principal residence with a 180 days a year cap!
Houston we have a problem. AIRBNB was no longer considered a viable option in Toronto for Real-Estate Investors.
For those who think Airbnb may still be an option to consider here are five things I have learnt over the last 10 years of managing Airbnb properties.
Run the Numbers
Before you become an Airbnb host, calculate whether the additional effort is worth the money, compared to what you could earn if you rented out the same space on a long-term lease.
Know Your Local Regulations
Every township and city have already implemented regulations or are considering it. Some places just require a permit while other are very restrictive like Toronto.
Location is everything
It’s important to keep in mind the distance to things like transit, amenities, and entertainment. It is also important to understand that prices fluctuate by season and location will play a key role in that.
Never Misrepresent the Property
Your guests will rate your property not just overall, but also on the accuracy of your listing. And if they feel misled when they arrive, they’ll leave terrible reviews. This would be a fast way to sink your short-term rental business.
Hire It Out
Sometimes it makes sense to consider an Airbnb property manager, especially if your property is not local or you already have a full schedule.
Having a property manager turns your Airbnb investment into a classic passive income. Some of the responsibilities would include cleaning in between guests, general maintenance, operating professional on the Airbnb platform, answering general inquiries in a timely fashion, and making sure guest check-ins go smoothly.