Air BnB short term rental or long term rental?
I am being asked this question on a regular basis these days, it would seem. With Air BnB being such a hot topic at the moment, I guess that it only makes sense that people are really starting to look at it as an option to help supplement their income, or perhaps in lieu of renting out their rental property on a full time fixed term lease basis.
Here in Vancouver, it is being blamed (or partially at least), for the current rental shortage. No question that it is a contributing factor, but it is most certainly not the major one as Mayor Robertson would like everyone to believe.
So, as municipalities in most major metropolitan areas around the world try to stomp out this business model that consumers seem to be overwhelmingly happy with, prospective home owners are left with the question of what to do?
Key property management questions
A couple of questions to ask yourself prior to making any decisions;
Does my building allow short term rentals?
Many Condo and Strata titled buildings, particularly in the Greater Vancouver area, are clamping down on short term rentals, regardless of how they are booked (VRBO, Air BnB, Craiglist, etc.). We are seeing strata corporations put forth bylaws to eliminate “hotel like licensing uses”, and short term leases of less than 30 days.
Does the City allow short term rentals?
Most municipalties already have a framework in place for rentals of less than 30 days. This can include outright banning them without a hotel or bed and breakfast license, or a taxation system so that they can take their cut. Best to look into this first, and keep in mind that new City bylaws are being introduced all the time to deal with this.
Do the returns justify the extra work involved?
At the end of the day, as a landlord, this is probably the most important thing to look at. Sure, renting out your apartment like a hotel can bring in much higher revenues, but the costs of managing the property will also be much higher. Be sure to factor in how many nights you’ll be vacant for (during peak and slow seasons), management fees, cleaning fees, laundry costs, bedsheets, and supplies such as toilet paper, shampoo, etc. You’ll be surprised at just how quickly these all add up. If the math doesn’t make sense, then stick to renting out your property on a year lease to one tenant. You can always hire a property management company to take care of that.
Do I have the time to manage a hotel business?
Managing a short term rental accommodation is very similar to managing a mini hotel business. You need to manage the bookings, do the check in, clean the unit, restock the supplies, review the tenant, take care of any maintenance issues, etc. This type of rental is much more hands on, and can eat away at a lot of your free time. Just keep this in mind before you take the plunge!
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Chris Stepchuk- Feb 1, 2017