Airbnb vs long term renting

[Slowly]

Anyone with experience as Airbnb hosts in Calgary? Just wondering what your general take is. Are there much vacancies? Is Calgary a good place for Airbnb? Advantages of Airbnb vs the traditional long term rentals?

Thanks.


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[taco.vidal]

Are you looking for accomodations or looking for tenants?

Originally Posted by Slowly

Anyone with experience as Airbnb hosts in Calgary? Just wondering what your general take is. Are there much vacancies? Is Calgary a good place for Airbnb? Advantages of Airbnb vs the traditional long term rentals?

Thanks.


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[Nyah]

What do you mean by 'long term'? Weeks, months, etc.?

[Slowly]

Originally Posted by taco.vidal

Are you looking for accomodations or looking for tenants?

Id be looking for tenants. I'm just wondering if renting out my space for short-term rentals (days, weeks, etc) via Airbnb is viable and profitable in the Calgary market.



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[Slowly]

Originally Posted by Nyah

What do you mean by 'long term'? Weeks, months, etc.?

Long term as in month-to-month or year-to-year contract.


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[Weitz]

Stolen from another site:

I was considering this and still am, so I talked to a friend who has had a successful Airbnb in Calgary for over 2 years. some things i learned or confirmed in our conversation:

1. dont bother if your place isnt in a Mission, Cliff Bungalow, Beltline, Downtown, Mount Royal, or something very desirable and walking distance to downtown and hot spots. at MINIMUM, short walk to a train but expect your vacancy rate to be higher if you are out of the core.

2. average rental is 7 days but they have ranged from 3 days to 2 full months before for him.

3. never book back to back (i.e. if someone is checking out on a monday, dont allow a new check-in until Tuesday at 4pm). the best and cheapest cleaners need this flexibility and you might need to go in and survey the place after every few rentals, repair something, etc.

4. start out with a lower rate than you think you can get. it will get more people through the door and you will get more reviews right away. if you think you can get $90 a night for example, price it at $70. the lower vacancy rate will pay off over the higher rate and higher vacancy.

5. small things go a long way. stock up on oils/condiments/spices for guests to cook. my friend find out about the person in advance and puts a 6 pack of local beer or wine or whatever they like in the fridge for people who stay 7+ days. this nice stuff and constant communication really makes the difference in getting good reviews.

6. he makes ~25% more than his costs (profit) over the span of a year. summer months he is fully booked, january is almost 100% vacancy, christmas is always good, fall/spring are 50% vacancy.

7. you have the right to say yes or no to anyone who is asking to book with you. he has turned away frat-type guys who are clearly there to party. usually says yes to couples or business people. gets a surprising amount of 7-14 day business people there for work project or conference.

8. airbnb's fees are passed on to the customer, not the landlord. so the price you set is the $ you get. also, airbnb has amazing customer service and very good insurance.

i'm still on the fence about it. he really sold me on it, however there is definitely more work involved (constant communication, coordinating cleaners, etc etc), and it's risky in terms of pissing off the condo board. not sure what recourse condo boards have but I think there are bylaws they can fall back on to shut it down if they want to.

hope that helps!

[Winsor_Pilates]

Where is your place?
I don't know vacancy rates in Calgary, but I'd assume you'd have to be inner city for it to make a lot of sense.

I know a lot of people who Airbnb their places here in Vancouver and make a killing on it.

[Slowly]

Originally Posted by Weitz

Stolen from another site:

That was very helpful. Thanks.


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[Slowly]

Originally Posted by Winsor_Pilates

Where is your place?
I don't know vacancy rates in Calgary, but I'd assume you'd have to be inner city for it to make a lot of sense.

I know a lot of people who Airbnb their places here in Vancouver and make a killing on it.

I actually don't have a place yet but I'm considering investing in one for Airbnb.

It was actually staying in many Vancouver Airbnb's which piqued my interest in researching the market for Calgary. Vancouver is ideal because it's a tourist place year round. Calgary's summer is nice and Stampede would be great, but other than that, not sure what the demand would be (especially in winter months).


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[peter12]

Look at the CAP rate. Maybe not worth it.

[Calgary14]

[PostandIn]

I have a bi-level house that I put a legal basement suite into in Sherwood Park and I agree with everything in Weitz' (re)post except for a couple things. My place in suburbia is well outside of Edmonton and book suites are always booked. This may be because Edmonton is no good but I'm having no problem keeping the units occupied. There has been a wide range of guests from Canada, the US and currently Europeans in the basement. People coming for weddings, K days / CapEx or whatever it's called, lol), business travellers, students, tradespeople, Fort Mac fire. All kinds.

I was going to initially do the long term lease thing but I researched and talked to some Airbnb hosts and ultimately went that way. It so far has been great. More than traditional leasing.

That said, there are things to consider. First, my neighbours sic'd the County on me because they saw people coming and going and didn't know what was going on. The county opened an investigation (certified letter c/w standard list of threats, lol) under the assumption that it was an actual bed and breakfast operation or a boarding house. Once I explained how Airbnb operated they have not called back. This gave me an opportunity to engage the neighbours. I explained everything to them, the guest vetting process, etal, gave my phone number and they obviously can see the investment that's been made plus the ongoing upkeep. At this point their concerns have been nullified and they are now eyes and ears for me in the event of any guest misadventures. A 180 swing. .

Second, there is work involved. We have opted to handle suite cleaning ourselves and leave a minimum of two days between guests. And average clean is four or five hours. Your place needs to be spotless, especially kitchens and bathrooms, when new guests come in. Lots of guests don't make much of an effort to clean up (despite the guest agreement), a few have been outright pigs and a few it's been like they were never there. Almost no one complies with the separation of waste thing (compostables, containers, paper and regular waste). I started with a no under 2 policy and have since changed it to no one under 12. Just too much extra work to clean up after grubby-handed kids. There's coded electronic locks on both suites and they work great. There's a furnace per suite and tankless hot water - eliminates a lot of hassles.

Most guests are reasonable and easy to deal with. As mentioned, some people screen themselves out of being guests when they see the verification criteria (credit card, phone number, email address, LinkedIn or face book, plus verified govt issued ID). You learn to say no to requests that come in at 8PM that say 'NEED IN TONITE!!!!' I've had no parties or disruptive things occur but one guest parked in front of my neighbours house for weeks and eventually had to be towed. He was also the worst guest I've had in terms of honesty and cleanliness. I think he has now been ruined on Airbnb due to loads of negative feedback from hosts. Some people will ask to do cash deals but the host loses the $1M tenant insurance if not booked through Airbnb. Expect to be lied to, regularly, about the number of guests that are staying which means more clean-up and less revenue.

All transactions are secured by credit card and Airbnb are great transferring funds via direct deposit. They also have been quick to respond to calls and generally have a really helpful approach to resolving issues.

All told, despite the occasional hassle, I'm glad I went the Airbnb route. It's worked out really well so far. Feel free to pm me if you'd like more detail.

[GGG]

Why did the county back off when you told them it was air bnb as opposed to a Bed and Breakfast?

[PostandIn]

An actual B&B has onsite hosts and some sort of meal service. Airbnb is short term rental of furnished suites using a website instead of a paper lease agreement.

[Amethyst]

From a neighbour perspective though, what's the difference?

[GGG]

I more wondering how airbnb / manages to skirt hotel/bnb zoning when it's effectively like trying to say uber isn't a livery business. Or does Sherwood park just blanket allow it to exist.

[PostandIn]

Originally Posted by Amethyst

From a neighbour perspective though, what's the difference?

The neighbours likely perceive no difference - just short term people coming and going. The reality is, and this was explained to them, that the guests are better vetted than the new boyfriend of the single mom across the street or the friends of the teenage boy who lives two or three doors down.

What really seemed to help as well was when I told them I wasn't angry that 'someone' called the county but instead it was a good thing because it would bring clarity. And it did. If I were the neighbours I would want to know that what was going on was legal and properly permitted too. Getting the municipality involved made it clear that I am in full compliance and that there is no action the County can / will take.

The other thing that I think has helped was that we have done more to upgrade the property in 10 months than what the previous owner did in 6 years so its obvious that we are not approaching this as an all take and only minimum give to keep it rentable.

Lastly, we are on site, cleaning, mowing the lawn, etc. regularly so we are accessible and active in the management of the property. All this stuff helps.

[PostandIn]

Originally Posted by GGG

I more wondering how airbnb / manages to skirt hotel/bnb zoning when it's effectively like trying to say uber isn't a livery business. Or does Sherwood park just blanket allow it to exist.

I'm not aware of the County's official position. I think that they see, like I do, areas of grey but are not compelled to do anything in particular unless there is ongoing public concern or repeated high profile events. They do not have by-law that expressly forbid this approach to renting. I thinks it's fair to say the most Airbnb hosts own their properties as personal investments (i.e. not corporations), so by definition the properties are not commercial hotels. Airbnb is simply a marketplace for hosts and renters to do business. The fundamentals are the same with advertising on Kijiji and doing all the administration myself, paying an agency (of which there are plenty) to do it for me or managing through Airbnb.

There is no definition in County by-laws for how long a rental or lease agreement must be. Legal basement suites are encouraged in Sherwood Park and there is a program that rebates a fairly substantial chunk of development costs in exchange for reduced rental rates for low income people. Where I think there could potentially be a problem is not with local by-laws but with certain provisions of the Provincial Residential Tenancies Act. The Act talks about joint inspections within the first week of tenancy, requirements for written notifications, hand over of physical keys, etc., a bunch of things that Airbnb does as a surrogate. Time will tell. This would hardly be the only Act that doesn't reflect technology advances and how business is done in 2016.