Many Canadian investors often aim to cover their monthly expenses with rental income, expecting to profit from their rental property’s appreciation. Even with 20 percent down, most investors still break even monthly, which means long-term real estate investment in Toronto produces strong returns consistently. What about Toronto short-term rentals? Are they profitable? How do you run a short-term rental? This article will answer these questions and other relevant regarding Toronto short-term rentals.
What’s a short-term rental property?
A short-term rental is simply a property with a lease term of less than a year (12 months). It can be a primary residence, townhome, or multi-family home. The owner typically purchases such property with the aim of leasing instead of living in it.
Generally, Toronto short-term rentals are very popular for Airbnb and vacation homes and popular travel destinations. They also offer great short-term rental accommodations, particularly for renters who require to stay in furnished rentals for less than a year. This is considered a traditional lease period. In recent years the short-term rental industry has transformed this seemingly side-gig for property owners looking to make passive income into a booming industry in Toronto and the entire Canadian real estate market.
Are Toronto short-term rentals a profitable investment?
A short-term rental can be profitable if managed properly. So, don’t think that it will bring substantial income without effort. Before you invest your financial resources, you must evaluate the specific components that determine whether the temporary housing option will create profit. Many short-term rental operators consider vacation destinations the best option as these properties are favored by tourists because of their affordable rates compared to expensive resorts and hotels.
It’s important to mention that local laws & regulations usually set the stage for Toronto short-term rentals and other types of real estate investments. Also, effective marketing strategies for your short-term rental properties can turn them into a goldmine, particularly if they are in prime locations like the city center. Therefore, the success of your rental unit (after you list it on the right short-term rental platforms) will depend on many factors.
How do you manage a short-term rental?
Though the Toronto short-term rentals or primary residence may seem like an easy way of making money, it requires a well-thought-out investment strategy to turn profits. The short-term rental market is becoming more competitive, particularly in popular travel destinations like Toronto. Therefore, you must implement the right investment approach to successfully manage your short-term rental furnished apartments. Here are tips to help you achieve this.
Keep your business records straight: You are now a property owner (business), and you can get bogged down by tasks such as property maintenance, guest screening, managing listings, and more. Regardless of how busy you are, keep your records straight and organized. This will make it easy for you to keep tabs on your furnished apartment’s maintenance expenses, property taxes, permits, insurance, and other expenses categorized as property management.
Screen your guests carefully: Whether your guests or tenants are Canadian citizens or not, screening is crucial because it helps ensure that you create a beneficial relationship with the tenant. Be sure to check the reviews left by previous landlords regarding the tenant’s everyday habits and other aspects of their stay. Also, make sure that the tenant understands the rules and stipulations of your short-term rental property.
Pay attention to local news and events: Although some vacation rentals stay full throughout the year, not every place is lucky to enjoy such a constant flow of guests. If there’s an upcoming event, you can find a way of attracting the right clients and market your unit accordingly. So, paying attention to local news and events can help you know when to market your rental unit rigorously.
Ensure proper property maintenance: Whether you turned your principal residence, 1- & 2-bedroom units, 3-bedroom units, penthouse units, or 3- & 4-bedroom units for rent (furnished apartments), renters expect to get well-maintained investment properties where they can stay during their stay in North America. So, if you want to keep on attracting guests and making money, consider creating a maintenance schedule. Also, provide alternate contact so that guests who need Toronto short-term rentals can find you quickly.
Provide exceptional customer service: Excellent customer service remains to be the foundation of a successful business, and Toronto short-term rentals are no exception. Therefore, ensure that your property has amazing amenities, 24-hour concierge service (if possible), and additional amenities that could make your Toronto short-term rentals an amazing unit.
Final thoughts
Toronto short-term rentals are one of the top ways to make money in the short-term rental industry. While it’s considered a passive income, managing such a business requires property investment prowess, money investment, and time. Also, you must have exceptional communication skills. Get in touch with Kean Real Estate Group to access real estate coaching and professional help to ensure the success of your real estate investments.
