Home- and condo-sharing sites such as Airbnb, VRBO and HomeAway have emerged as popular options for investors who wish to rent their units on a short-term basis.
While these sites are viable options for renters, they are becoming increasingly contentious. Some argue that short-term rental sites put more pressure on cities such as Toronto, as much needed rental housing is coming off the market in favour of a short-term rental strategy. Concerns around safety have also been called into question and hoteliers argue that Airbnb rentals function as quasi-hotels, but aren’t upheld to the same rules and regulations. The legalities surrounding short-term rentals are complex, and cities are making efforts to examine their implications and how to regulate them.
YP NextHome caught up with Kelly Hewitt, a former Airbnb host and founder of 201 Management, a company that manages Airbnb properties on behalf of hosts, to get the scoop on short-term rental properties. Do the benefits of having a short-term rental investment property outweigh the costs and risks? Here’s an age-old pros and cons list, so you can be the judge.
- Flexibility: Short-term rentals allow owners to inhabit their space as needed.
- More lucrative: According to Hewitt, “You can double traditional rent…. I was making $4,000 a month on my condo and it was almost guaranteed that I’d always have someone in there.”
- Reviews: Hosts can gauge the credibility of guests based on their online reviews.
- Host Guarantee: Airbnb’s Host Guarentee provides protection for up to $1,000,000 in damage.
- Less wear and tear: “Airbnb is much easier on your apartment. The guests are usually tourists or business people who generally just sleep there,” says Hewitt.
- No renters’ rights: “You don’t need to worry about renters’ rights,” says Hewitt. “If you don’t like the person staying in your unit, you can kick them out easily, without having to go through an eviction process.”
- Changing regulations: “Nothing is set in stone and you don’t know how the regulations on short-term rentals will change” says Hewitt.
- Time consuming: Using Airbnb is more time-consuming than having a full-time renter. According to Hewitt, Airbnb hosts “are often on call 24/7.”
- High tenant turnover: The average stay in Toronto, for example, is 4.2 nights, according to Airbnb. Therefore, units must be cleaned and prepped for new guests often.
- Costs: You must budget for cleaning costs. And at tax time, hosts must report their short-term rental income.
- Airbnb rentals can get shut down: “Things can go wrong with an Airbnb property and it’s easy to get shut down – especially a condo. One of my guests had a party and we had to shut down our Airbnb . We had to get a regular tenant after that,” says Hewitt.