I have a few rental units. And every once in awhile I think: Why don’t I furnish one of these unit up nicely and do an airbnb? Perhaps it would be a better return on my investment if I run a DIY hotel suite.
I’m certainly not the first person to have this idea. When I look around my High Park/ Junction neighbourhood, I am amazed at how many air bnbs are available for a neighbourhood I would say is a lot more desireable for long term renters than a tourist who wants to walk everywhere. Closer to downtown, you would have even more options for airbnb and more tourists.
It’s pretty clear then that landlords and ladies, and even tenants and homeowners, around the city, are trying to maximize their living spaces by offering up apartments, rooms and whole houses to Toronto-bound traveler, particularly around higher tourist times.
It’s the über-fication of yet another industry.
And the number can work for you if you want to air bnb. If you have a one bedroom apartment for $1750/month on a regular basis. That’s $56/day. On air bnb, you could make $80 to $150/day for the same unit depending on location and time of the year. Plus, you don’t have to have a long-term lease. There’s more work involved though. You do have to have the cleaners (or you) to go through and clean up and wash sheets. You have to advertise, and you have to schedule. It’s more labour intensive and requires a bit of marketing. Still, it seems to have really taken off in Toronto and really in almost every city and remote town you can find.
Now, my point here is not to say that airbnbs are fantastic and you should try hosting. It’s a personal choice. It’s more work, but more returns if you could turn over enough folks and have enough people stay regularly. Regardless if this is a good thing or not, or if you have any interest in airbnb, it has made some serious impact on Toronto.
First, and most obvious, it has really challenged the hotel industry. And for us not in the hotel industry, this usually means that hotels have been pressured through airbnb competition to bring their rates down. Living in Toronto, most of us don’t stay in a hotel in our own city very often, but it really applies to all cities.
It’s a tough time to be in the hotel industry when there are so many more air bnbs as competition.
Personally, I like a good airbnb when I’m away because I have a kitchen to store snacks and a simple breakfast in the morning. But if you like hotels, then the just became a whole lot more reasonably priced since airbnb. Thank you airbnb.
There is another impact on airbnb that does effect everyone who is involved with renting properties in Toronto whether you are a renter or someone who is renting. Some of those apartments that were once leased for a year, then month to month are now airbnbs. And these airbnb units take conventional rental units out of the pool of units available to rent for long-term folks who live in Toronto.
Before airbnb, those units that were functioning largely as leases instead of a hotel. Now there are a lot less lease properties available for those who want to live in an apartment.
What does that mean? You have it! Rents go up. It’s simply supply and demand. As supply does down, demand goes up. So, rents have been going up. I think there was a time not so long ago where there was fear that the rental market would be flooded with new condo units that were purchased and then leased out. And there are a lot of new condos coming to the market every month, but maybe this isn’t such a bad thing. It creates more rental properties and keeps rents more reasonable for renters.
As far as airbnb goes, if you’re a renter, these air bnbs all over the city may not be such a good thing for you. They could be causing your rents to go up.
If you are a landlord or a homeowner, airbnb is your financial friend.
Not only can you make money of airbnb by renting out your property as a vacation rental, but you make more on your conventional leases to local Torontonians because the rental stock is kept lower through airbnb. Yay! More money.