More Canadians are turning to short-term rentals to earn extra money, maintain real estate

When Marcus Rader returned home from an extended winter trip last year, he was greeted with a broken oven, freezing temperatures, and a week’s wait for repairs.

This winter, he listed his 150-year-old home in downtown Toronto on Airbnb, the short-term rental booking website.

“We now rent our home in the winter, but it’s definitely not for the money,” said Rader, co-founder and CEO of Hostaway, a vacation rental software and management system.

“The main attraction for us is just that there are people. That is the most important value.”

The decision paid off this winter, when a sewer pipe broke in the basement – a problem they were able to quickly fix before further damage was done.

“When we got home, it was already fixed,” Rader said. “They dug out the entire basement and fixed the problem.”

More Canadians are wading into the short-term rental market, with a notable surge in new listings last year, according to Airbnb.

Landlords are motivated for several reasons, including the added security of people on the property when they are away.

But many others are drawn to the opportunity to earn extra income.

The rising cost of living is contributing to a new wave of Canadians according to Airbnb rent out their houses or cottages for the first time.

“With the rising cost of living and inflation, more And more Canadians want to become Airbnb hosts for the first time, and that comes as more And more travelers want affordable travel,” said Airbnb spokesperson Matt McNama.

The typical host in Canada made about $7,700 last summer and more more than $12,000 year-round, money that can help cover higher mortgage payments, utilities and other costs, the company said.

Jennifer Greatrex, named best Airbnb host for Ontario last year, said she earns an income renting out her yurt north of Kingston, Ont. It has no running water and a burning toilet in an outbuilding.

“It wasn’t my intention for it to be my full-time income, but it is and I’m so thankful I suffered a brain injury on the trip, so running my own business has been a lifesaver,” said she, noting that she now earns enough from her rent to replace the income she earned from a full-time job.

“I really enjoy being a host and would like to encourage others to take the plunge.”

While the opportunity to earn an income is enticing, industry experts say new landlords should educate themselves on some important issues to minimize some of the pitfalls that can arise when managing a short-term rental.

Some tips are simple and relatively easy to apply: Use an electronic keypad to enter so that guests can check themselves in. Hire a cleaner and charge a fee to offset the cost. Use saved messages to quickly respond to frequently asked questions.

Others are more complex.

“I can tell you that a lot of people are looking for tricks or hacks,” Rader said. “Maybe there are some simple things you can do to improve the experience for both the owner and the renter. But the truth is that it takes some work.”

An important first step is to check the short-term rental rules in your area.

Some communities have introduced new regulations in recent years, such as requiring properties to be registered with the city or only allowing short-term rentals in an owner’s primary residence.

It’s a problem real estate investor Sebastian Jania has experienced firsthand.

The director of Ontario Property Buyers — a company that buys homes in as-is with cash — bought a property in the southwestern Ontario town of Brantford to convert it into short-term rentals.

Soon after, the city changed the rules and now only allows rentals of less than 28 days in a primary residence.

“We had to switch to medium-term rentals, which doesn’t make much sense financially,” said Jania. “The rules around short-term rentals are changing, so it’s good to know that before you dive in.”

In other cases, mortgage or rent restrictions may prohibit someone from subletting or being a short-term landlord.

There are also implications for income tax, safety and cleanliness considerations and general noise concerns, experts say.

“You want to make sure you don’t upset the neighbors,” Rader said. “You want to avoid partiers and sometimes that means locals.”

Sometimes local residents want a short-term rental while they renovate their home or accommodate wedding guests. But otherwise, they could just be looking for a big bash that could disturb the neighbors, he said.

Industry experts say it’s also important for people to understand some of the cost, from providing guests with snacks to replenishing toilet paper, soap, and shampoo.

Also, regular maintenance is a must to avoid cancellations, disappointed guests and possibly bad reviews, they say.

“I stayed in an Airbnb in the Muskokas last weekend and it was 30 degrees and the AC didn’t work,” said Jania. “If someone decides to leave a bad review, it can have major consequences for future bookings.”

Meanwhile, when you’re ready to rent, getting things right is critical.

“You only have a few stays to make a good first impression,” Jania said. “If you get some bad reviews to begin with, you are at a huge disadvantage because so many people are entering this space and consumers have more options than ever.”

To help get started, Airbnb said it offers one-on-one coaching and advice from experienced hosts and the option to book an experienced guest for an initial booking.

“I recommend having friends or family stay for the first few visits who can give you honest feedback,” Jania said. “That way you have a chance to address any issues.”