A question comes up quite often is should one turn the current rental(s) into Airbnb? My personal view on this is quite simple: No. More accurately, I don’t recommend this option for the city I am currently living in – Edmonton. The reason? I can sum-up it in three words “Good, bad, & ugly”.
In this post, I will share with you what are these reasons in detail and why Edmonton, in my personal opinion, might not be the best place for Airbnb option.
Airbnb was started in 2008 by a few college students, with a simple idea – “sub-let” the living room of their rental to a few-night-dwellers and make a few quick bucks. (which if you think about it from a different angle, it is likely not what many landlords originally bargained for…). Via Airbnb’s platform, homeowners can turn their empty rooms into a reliable income making machine, while the savvy travelers save money by staying in residential homes instead of expensive hotels.
In recent years, instead of just renting out empty room(s), it becomes more and more common to turn the whole house/condo/rental into the Airbnb accommodation exclusively. People who are doing his for some obvious good reasons. To name a few:
It all seems great until you ask you a simple question: what is the catch? There are some unpleasant surprises about Airbnb once a newbie dips the feet into the water
Here are a few common concerns/issue you may need to be aware of:
Besides the above 2 obvious downsides, there are some not so obvious and ‘ugly’ aspects one should know before trying out Airbnb.
As a personal opinion, I don’t think Edmonton is the best city to host Airbnb, especially you are hoping to exert it as the main investment tool replacing the long term renting option. Here are the 3 key disadvantages:
01). The demand are far less than the Airbnb’s in the cities of tourist favorite destinations, such as Vancouver. It translates into high vacancy rate and lower daily rate.
02). The long-winter months also means a high than normal vacancy rates throughout the year, which will compromise the overall income greatly.
03). The city of Edmonton is a big advocate of affordable housing, and Airbnb is not something on the top of the priority list to be prompted anytime soon.
When there is less demand, higher vacancy rate, and less favorable regulation from the local government, one might find an uphill battle in turning your current rental to Airbnb.
Airbnb, is one of many effective real estate investment vehicles, if it is being used properly. It is up to the individual “driver” to decide how to pick the right option at the right time on the right location.