Over the last few years, short-term rental site Airbnb has become a go-to solution for those looking to rent and rent out their homes and condos to tourists and business travellers when visiting Ottawa. It provides a cheaper solution to the tenant, and an increased return for the investor. Wait.... not just an increased return, but double or almost triple the return. More and more people are asking about buying a property for Airbnb especially after looking at the numbers. Roughly - One Bedrooms rent out for $1,400 per month vs $120 per night on Airbnb.
BUT WAIT. As this trend grew, more issues have started to arise and everyone caught on. Bad tenants, scams, and insurance companies were/are just the beginning. The number one issue today is the condo board and by-laws being put in place to restrict rentals that are less than six months in length. This is a building-by-building issue however, the majority of condo buildings across the city have now placed a restriction in the rules.
There are still buildings that still allow short-term rentals in Ottawa but buying a unit within a condo building now is a much larger gamble as each day passes and more rules are added.
If not a condo, then what? The shift we are seeing now is away from the high-rise single condo unit and towards multi-unit buildings or single family homes and being converted to these almost rooming house style. The key for a successful AirBNB listing is mainly location (other than price etc), and the best locations typically have a higher purchase price, and to make these numbers work and cash flow, these investors are having to create their own product to fit the bill. By starting with a single family residence, you don't have the condo board setting the rules. The city is strict with rooming houses, so don't think you can just have 10 rentals in a single home. If you plan on having a home with four rooming units or more - then you will require a city license (and follow the permit requirements) - click here.
There are a large number of places that could be a perfect fit, but these short-term rentals now come at a higher cost to the investor - they are not an easy money solution anymore. They require extra work and extra investment up front. If you are considering entering the short-term rental market and would like to chat, get in touch. Maybe there is another real estate product that would better fit your needs.