Regular rental or Airbnb?

[Hommel]

Hello all,

I am new here in this forum and hoping to get some opinions.
We are just in the process of buying a beautiful sub penthouse in the Beltline area.
We have not decided if we rent the condo out or make it an Airbnb.
Background:
We bought the condo a few years back still in the pre construction phase and when the market was way better.
It's brand new on the 26th floor and considered a sub penthouse.
1250sqf living space with 2 balcony, 2 bedroom and 2 bathroom.
Hope to get some feedback and opinions to help us with our decision.
And we are fully aware of the risk running an Airbnb.

Thanks

[photon]

Airbnb just seems like it would be a ton of extra work and wear.

I'd want to be pretty confident that the payoff would be worth it given that and the vacant times. How much more will it make as an Airbnb?

[Hommel]

Hey,

I would give it away to a management company and they do all the work. All I want is not to loose money.
Since the overall rent dropped quiet a bit in Calgary and considering the high vacancy rate I figure to might give it a try.
Plus, we can use the condo when not occupied.

[Canehdianman]

A submersible penthouse would probably get a lot of money on Airbnb.

You'd have evil masterminds lining up to sign multi year leases.

[photon]

I'd be leery of how much a management company would charge for that, management can be 15-20% in Calgary for a regular rental, one concierge management company I talked to once for a luxury rental wanted 35% (they did cleaning and laundry and stuff, executive rentals). I'd imagine they'd want even more for a place that'll have new tenants every week. If there is even a company in Calgary that'll do that at all.

You could maybe get what, $150 - $250 a night depending on location and furnishings (more for peak season, less for off peak)? Say average $200, that's $1400 a week, if you had 50% occupancy (which seems high to me but I don't have much info on vacation rental occupancy rates in Calgary) that'd only be $2800 a month gross. Assume 25% management fee (which seems super low for an Airbnb) so $2100.

Depending on location you could probably get more than that as a regular rental for lower risk.

EDIT: Also I'd wonder if that kind of thing is even allowed, most condo boards are hostile to owners that rent already, I bet my condo board has an anti-weekly rental clause already lol.

[DownhillGoat]

How popular is Calgary for AirBnB? Outside of Stampede I can't see it being a massive draw, at least not worth the hassle. For tourism it seems more like a gateway, and as a business hub, I don't think a lot of companies are going to be renting an AirBnB for conferences.

[photon]

Originally Posted by kunkstyle

How popular is Calgary for AirBnB?

Not sure how popular it is, but there's a LOT of rentals, I just put the map over the downtown area (14th Street to just past the Dome, 16th Ave down to 42nd Ave) and there's almost 300 rentals!

[DownhillGoat]

Originally Posted by photon

Not sure how popular it is, but there's a LOT of rentals, I just put the map over the downtown area (14th Street to just past the Dome, 16th Ave down to 42nd Ave) and there's almost 300 rentals!

Yeah I've looked at Calgary before out of curiosity. Just seems like it'd be nowhere close to the demand of even the semi-busy nearby resort towns.

Curious how many of those 300 are rented ever.

Outside of orgies that is.

[tete]

I'd ensure that your bylaws don't prohibit short term rentals. I know our condo bylaws do not allow vacation rental properties and fines can be levied to the owners.

ETA: Photon mentioned this already, sorry.

[Hommel]

Yes there is a management company and they charge 15% of the total rent.
Cleaning fee is payed by the guest.
They proved that there is a high demand with an expected 25 days/monthly occupancy rate.
They get this kind of occupancy rate by offering affordable rates average 125.00$/night.
We will give it a try and also offering the suite as executive rental.

[photon]

Originally Posted by kunkstyle

Curious how many of those 300 are rented ever.

On Airbnb and VRBO if you click to add a date it'll pop up an availability calendar, some are rented pretty good for the next few months, others not so much.

[Hommel]

Yes it is about the rate and location.
We run successfully a vacation home in Phoenix but just have no feel for Calgary.
I know you get many short notice bookings.

[bizaro86]

Originally Posted by Hommel

Yes there is a management company and they charge 15% of the total rent.
Cleaning fee is payed by the guest.
They proved that there is a high demand with an expected 25 days/monthly occupancy rate.
They get this kind of occupancy rate by offering affordable rates average 125.00$/night.
We will give it a try and also offering the suite as executive rental.

I would suggest their expected occupancy rate is not the same as "proof."

Also, a big/luxury condo is extremely sub-optimal for airbnb purposes, because it costs way more up front and per month (higher condo fees) than a smaller low floor, older condo. But on AirBnB most people will be filtering by price/size/location, and a few nice interior shots will add just as much value as being the "sub-penthouse."

[photon]

Originally Posted by Hommel

Yes there is a management company and they charge 15% of the total rent.
Cleaning fee is payed by the guest.
They proved that there is a high demand with an expected 25 days/monthly occupancy rate.
They get this kind of occupancy rate by offering affordable rates average 125.00$/night.
We will give it a try and also offering the suite as executive rental.

That sounds not bad, who's the management company? Rates are probably better than when I looked as the market is very different now (I was looking more when things were still going up).

I have an executive condo that I used to rent out more like this (targeted towards companies not Airbnb) but switched to a more traditional as the companies stopped bringing people in. So wouldn't mind talking to the management company I might switch back to more executive style.

If you can get 25 days monthly at that rate average then it sounds like that would work out pretty well.

[Hommel]

Yeah the numbers seem to work out with a 25 day occupancy rate.
And I can pm you the details for the management company if you like?
I will as well try to rent it out long term but not sure if I get my cost covered at all.
So far thanks everybody for the great feedback. Guess time will show!

[photon]

Originally Posted by Hommel

Yeah the numbers seem to work out with a 25 day occupancy rate.
And I can pm you the details for the management company if you like?
I will as well try to rent it out long term but not sure if I get my cost covered at all.
So far thanks everybody for the great feedback. Guess time will show!

Yeah, send me a PM please. I have a renter on contract right now but after they're off might be time to change it up a bit.

I guess the other nice part of trying short term rentals is if it doesn't work you can easily switch, where if you get a 1 year long term rental you have to wait to try the other way.

[Bigtime]

A sub penthouse on the 26th floor? I'm going to take a stab and guess this is Brad Lamb's 6th & Tenth development on 10th avenue and 6th street SW.

[jwslam]

Originally Posted by Bigtime

A sub penthouse on the 26th floor? I'm going to take a stab and guess this is Brad Lamb's 6th & Tenth development on 10th avenue and 6th street SW.

If so, that location is not the most optimal and I highly doubt you'll average 25 days/month @ $125 especially during low season (so 51/52 weeks that's not Stampede)

[Hommel]

If so, that location is not the most optimal and I highly doubt you'll average 25 days/month @ $125 especially during low season (so 51/52 weeks that's not Stampede)
jwslam is online now Report Post



I doubt the 25 days occupancy rate as well... thats what I got promised from the management company.
They showed me comparable rentals in same area having 25 days/month occupancy rate.
In regards to the location. We picked the location 2 years ago with the plan to rent out long term. Only due to the high vacancy rate at the moment we consider Airbnb.
That being said, we might rent out long term at a later point. There will always be a demand for Downtown Condos I am sure.

[jwslam]

Originally Posted by Hommel

I doubt the 25 days occupancy rate as well... thats what I got promised from the management company.
They showed me comparable rentals in same area having 25 days/month occupancy rate.
In regards to the location. We picked the location 2 years ago with the plan to rent out long term. Only due to the high vacancy rate at the moment we consider Airbnb.
That being said, we might rent out long term at a later point. There will always be a demand for Downtown Condos I am sure.

Define "same area"
If they're showing you stuff that's on something like 16th ave, that's a significant difference. If all else equal (number of beds, size, bathrooms, finishings, $/night, etc), would someone who's 25y/o and here to party be willing to walk 6 more blocks to 17th ave just to stay at your place?

I'm not saying that 6&10 is a bad location, I'm saying that for a visitor, there is nothing attractive in that area. Whereas for a long-term local, there's grocery stores, very walkable to downtown work & LRT.

Also the other thing to consider is if you're going AirBnB now, you need to fully furnish the place. That's a big upfront cost. Will you decide to use all new furniture, for people who don't actually care? Or will you decide to buy 2nd hand which will take a lot more time and judgement to find good pieces.
Then when you decide to go long term, the market for fully furnished is maybe in the 25% range (my personal conservative guess). You're writing off 75% of the people who would like to bring their own furnishings unless you have somewhere to put / get rid of the furnishings