For people wanting to dip their toes into the rental market, Airbnb hosting in Calgary, Alberta offers an easy entry into real estate. Or does it?
As of 2021, 37% of short-term rentals were managed independently as opposed to only 8.6% which were managed professionally. Airbnb offerings include private rooms, suites, and entire houses. According to short-term rental data source Airbtics, a 2-bedroom apartment in Calgary can make up to $21,108 each year. Is it lucrative? Maybe yes, maybe no.
Municipalities did not have any regulations when Airbnb was new, but that’s since changed. Since 2020, the Calgary municipality has required a business license/s to operate short-term rentals in Calgary, Alberta.
Rules and regulations
Business licenses of rentals with 1-4 bedrooms cost $100, while over 4 costs $276, including the cost of a fire inspection. Hosts can either follow the guidelines or face fines of $1000. Additionally, hosts are required to follow the Calgary short-term rental regulations, which include;
- One egress window per room rental
- Only 2 adults/per room, not including minors
- Hosts may not offer multiple bookings for the same dwelling at the same time
- Advertising must provide the company license number
- The name, phone number, and email address of a contact person that can be reached 24 hours a day must be posted in a visible area
- Hosts must have a hard copy in English and an electronic format for the Chief License Inspector
- Hosts are required to keep permanent records of transactions that are available to the Chief License Inspector when requested
- Hosts are required to pay a tourism levy
Since there’s no minimum time requirement, many Airbnb hosts love the flexibility of hosting if and when they choose. Do you want to rent out the spare bedroom in your condo for a month? Do you want to take a break from Airbnb hosting to reserve your guest room for visiting family members? Your choice.
This begs the question, which is more profitable, short-term rentals or long-term rentals?
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Depending on your Airbnb location, your income may be erratic, and there is more effort involved in scheduling guests, cleaning, and collecting weekly rent.
Higher-income, more expenses
Although short-term rentals pay more than long-term rentals, guests come with the expectation of hotel quality standards. If you’re not doing the cleaning and stocking supplies or maintenance yourself, you need to have a well-organized team. Although services, supplies, management fees, maintenance, and utilities are income tax-deductible, you’ll need to calculate if you’re making a profit after you’ve paid the expenses. Insurance may be a little tricky as many providers won’t insure Airbnb rentals.
Less wear and tear
Because Airbnb guests stay for shorter periods and are rated at the end of their stay by the host, there is typically less wear and tear on your property. If you’re a social person you’ll find Airbnb guests are typically well-traveled, interesting, and take care of the property.
Even though most Airbnb guests are good people, there is a certain amount of risk involved in having tourists pass through your doors. Recently, there have been some high-profile theft, damage, assault, and illegal activity cases.
Is Airbnb allowed in your condo/area?
Some neighbourhoods and condominiums do not allow Airbnb. There is perceived danger to residents and interruption to peaceful surroundings from an ongoing stream of tourists.
Is Airbnb Arbitrage allowed?
Airbnb rental arbitrage – or renting out a property under your name and then turning it into an Airbnb rental may sound like a great way to make extra bucks, but it may not be legal. It’s important to know the legislation in your area and to check with the landlord first.
If your property qualifies and you’re wondering how much money you can make by converting a room, a condo, or a home to an Airbnb – the Airbnb dashboard offers a handy dandy calculator. The calculator shows stats on which neighbourhoods, amenities, and houses are in demand and the market’s historical performance.
Do you own Airbnb’s or have you done Airbnb Arbitrage? I’d love to hear about it and how they’re working out for you email me [email protected]
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