Newsflash – real estate in Toronto and Vancouver is ridiculously expensive, meaning most homeowners are carrying sizeable mortgages. And while those looking to offset their monster home costs can always take on a part-time job or side hustle, offering part or all of one’s home via a short-term rental like Airbnb has exploded in popularity. After all, if you’ve got a spare bedroom, why not put it to good use and earn some extra income?
It should come as no surprise then that short-term rental websites have taken off in the downtown markets of big cities. Airbnb has proved especially popular in Vancouver, Canada’s priciest real estate market. More than half of Airbnb hosts in Vancouver use their rental income to pay their mortgage and rent, according to a report released by company, which also finds the average host earns $6,500 a year.
“The majority of the Airbnbs that I see are condos near the downtown core. People want walkability and want to be near the action. It has been a great source of secondary income for owners helping them supplement their own travels for weekend trips,” says Carlos Moniz, a real estate sales representative at Zoocasa.
Not Everyone is a Fan of Short-Term Rentals
While Airbnb may be a good way to “subsidize” your mortgage, not everyone is a fan of the short-term rental website. As regulations look to keep up with the sharing economy, disruptors like Uber and Airbnb operate in a legal grey zone. Condo boards are left to put their own rules in place. Some new condo buildings have no restrictions on renting places out short-term, while others are cracking down (and in some cases outright banning them). Some condos only accept minimum leases of three or six months and require for the renter to register for a security fob and for the landlord to supply a copy of the signed lease.
“Many condo corporations will not allow short term rentals like this but it is very difficult to enforce. Newer condos have caught onto this growing trend of Airbnb and have excluded short term rentals in their rules and regulations,” says Moniz.
Condo boards are dealing with a laundry list of complaints ranging from added wear-and-tear on common areas and higher utility bills, which could lead to an increase in maintenance fees. Residents are unhappy their condos are being turned into makeshift hotels by transient renters who don’t have the same pride of ownership that they do.
Related Read: How to Turn Your Property Into a Vacation Rental
Can Airbnb Devalue Your Condo?
A major concern of condo owners is that their building could see a devaluation should it develop a big history of Airbnb usage – but their fears may not be justified.
“It’s important to not completely correlate Airbnb rentals with a typical lease arrangement,” says Jonathan Amodeo, another Zoocasa agent. “Hosts listings generally act in replacement of a hotel (for mostly short term periods) – therefore, keeping up a clean space, having suitable décor, and other comfortable/visually pleasing characteristics within the space could add to the unit retaining its value. Hosts also tend to pre-qualify their guests as they have a vested interest in their property investment.”
Regulating Airbnb
Municipalities across the country are taking an ad hoc approach to dealing with Airbnb. Quebec, for instance, has restricted its rules on short-term rentals, while Toronto is still debating how to best deal with them. It will be interesting to see how it plays out.
“As an Airbnb host, my preference is for individual condos to regulate these types of short term rentals through the elected condo board,” said Amodeo. “The condo board is meant to act in the best interest of all unit owners and would collectively have a more realistic approach and manageable effort in regulating fairly. To do so from a municipal, provincial, or even national level would be far too broad and perhaps lead to other issues due to its inflexibility.”
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