Airbnb

Exelethril

I've been scouring the net/talking to people about the concept of making down payments -> renovating -> renting out condos at rates cheaper than 4-5 star hotels to pay off the mortgage.

Just wondering if anyone has any experience with this form of investing and what are the potential downsides?

Skye

No experience with the line but... I imagine there will potentially be same problems you'll have with renting to just about anyone else really. You can't really guarantee what kinda tenant you'll get.

Also, it's not like you can just load up an apartment with cheap IKEA furniture and let it run itself: Airbnb tends also to be favoured by people travelling on a budget like backpackers etc who are used to staying in budget places or countries where the hygiene isn't necessarily as good. Sometimes they bring those issues with them as they come/go. You gotta take into account those issues like bedbugs etc, stuff that will need serious and regular heavy duty cleaning. It's bad enough if your furniture / carpetting becomes contaminated, but it'll be even worse if you get marked down for becoming a vector for bugs. Those become added expenses and time spent.

Szanthax

I'm the eternal optimist, but... this sounds not wise to me.

I live in San Diego, so I know more than a few apartment/condo owners that instead of renting to people like they normally would, they are simply doing airbnb and getting the money they'd get out of me in a month, in a week and a half. Very smart.. it seems.

The downside is now that the HOA's are onto it they've implemented rules indicated that they are unable to do short term stays (less than a month) so it can sometimes still work out but is it really financially smarter to do that?

Now I can see if you just did whatever you wanted to do and had your insurance up and made sure that you had your cleaning services up and really wanted to make it a job... I think it could work, but I have a hard time seeing it being profitable or even paying for itself in cities that are not tourist destinations (aka where you will get your mortgage+costs every month guaranteed).

I just don't see it being a long term investment, and since your loan is 30 years... that doesnt really make sense to me.

Exelethril

Well, I live in Toronto. I don't think traffic would be a problem for me as opposed to an over-saturated market. As long as there's a demand for hotels, I think some savvier travellers would always prefer Airbnb apartments (cheaper + more amenities)

Szanthax

I'll agree with that. But remember the trepidation runs both ways. 

I'd probably just think of it as any other rental property.

I work in time share so I obviously see how people want those comforts of home.. But there are benefits associated with brands, even at the cost. 

I would stay at an airbnb... My parents... Probably not.

Tylor

I used to work alongside a friend who did this kind of thing. He's got quite a few properties and rents them out for Airbnb. He has constant bookings but then again, it's London. Never a lack of people. 

The most stressful part was that although people are paying at significantly cheaper prices, most expected tailored guest hosting with attention to detail provisions. In short, people are hard to please. Then again, you have some guests who have little to no expectations and are happy with running water and four walls. 

Then there are the groups of 5/6/7/8+ who "don't mind" sleeping on air beds but then complain they deflate after having a house party.  haha 

tl:dr - you can't win haha 

Exelethril

Well, this is the property I'm buying to AirBnB in May/June (not the one near the U of T anymore) and truthfully, I have no idea what the fcuk I'm doing and will probably be broke for the next year to three. It's really tiny and literally 2-10 minutes by foot to the Toronto Metro Convention Centre/Rogers Stadium/Harbour/Financial District.

Szanthax

Now i have to go to toronto... or tokyo? or both...

Rangor

Exelethril said:

Well, this is the property I'm buying to AirBnB in May/June (not the one near the U of T anymore) and truthfully, I have no idea what the fcuk I'm doing and will probably be broke for the next year to three. It's really tiny and literally 2-10 minutes by foot to the Toronto Metro Convention Centre/Rogers Stadium/Harbour/Financial District.

Guess I know where to stay when I visit Toronto

Tylor

Exelethril said:

Well, this is the property I'm buying to AirBnB in May/June (not the one near the U of T anymore) and truthfully, I have no idea what the fcuk I'm doing and will probably be broke for the next year to three. It's really tiny and literally 2-10 minutes by foot to the Toronto Metro Convention Centre/Rogers Stadium/Harbour/Financial District.

You won't be broke if you do your calculations. First things first, check to see what other Airbnbs are hosting in the area, including prices and amenities. Match them decide if you can go cheaper. If you can't afford to go cheaper than you need to up sell the place by making it more appealing than the others around you. You may not have people paying all the time, so pricing it slightly above it paying for itself will give you some cushion for when there are periods of no bookings. If you get more bookings than expected, you can alter the price per night according to your inflow and outflow. 

You can always appeal to bigger groups by offering air beds or having a sofa bed. The bigger your catchment the more likely you'll get bookings all year round. 

Provide basics like tea, coffee, cereals. It's also pretty standard to have maps and information about the local area for the people visiting, and offering a pick up service to and from destination of arrival to the front door is a bonus. The only thing you have to do is give your number to the people visiting, hand over keys and clean the place when they're done. 

The pictures already sell it for you, the rest is done on the Airbnb site where they fill out the forms and you can choose whether to approve the booking or not.  

Quisse

Speaking from being an experienced landlord: it's a nightmare more often than not. No one will love or treat your place as kindly as you do, and you may be entirely amazed at how demanding/slovenly/careless/(insert cringeworthy adjective here) people can and will be. Tread really carefully and do your homework regarding the success of this sort of thing in your area.... if this is your first place/experience with this sort of thing especially!

Eta: also, make sure your insurance policy is going to be on board with this. Not having insurance/being poorly insured will be bad bad bad.

Krypton

Looks like you are in a large, high-rise complex? What is the building/HOA policy on Airbnb & short-term rentals?

I deal with Airbnb every day, and on their home turf of San Francisco -- even here, rarely can someone rent out a high-rise condo because neighbors/building security are just not going to tolerate random subletters coming in and out of the place all the time.

Exelethril

@Krypton : It's a studio on the 37th floor of the Ice Condos on York st. Apparently, it's allowed or this person is just doing it under the radar : Link . From what I hear, most AirBnBers don't actually notify the concierge/security and just rent out their condos discretely.

@Quisse : As for insurance, I didn't actually consider how much the premium would be for short term rentals. I'm expecting something ridiculous and it's not something I can loop around either by declaring otherwise (since in the event of a real fire and a guest is staying over, I'm pretty much done for)

Arador

This topic is not nearly as sleazy as the title made me think it would be. 

Exelethril

Does anyone know if "occupant" means something along the lines of a person that's "officially" leasing the unit, as in rental.. not AirBnB? Like, what happens if a stranger from AirBnB runs away with my key and never returns?

The concierge will find out about my AirBnB-ing, I think 

Jacero

I'm not a lawyer, but from the phrasing it looks like it's referring to the person that actively occupies the residence (in your case, the renter).

Exelethril

Well, damn.. under the table it is.

Cooper

Sounds like a good way to break your lease and get kicked out and heavily fined

Exelethril

I own the condo. If I incur anything, it'll be management wrath, poor returns on mortgage payments and a fine.

In that case, I'll just rent it out.

Szanthax

you could still airbnb but you'd have to set a minimum to make sure people dont f you over. I mean you have to report to management everyone you rent to so that's a pain.

Exelethril

Posted everywhere from Kijiji/craigslist/Facebook/viewit etc, gonna try here. Hoping to get this rented out asap before the new year starts. If anyone knows anyone looking for a 6-month or longer term rental in prime downtown Toronto, let me know and will give 10% of first month's rental as commission

This is my Airbnb listing - https://www.airbnb.ca/rooms/12643254

(got a legal letter so had to cancel all short term rentals)

Szanthax

Said  the listing is no longer available

Exelethril

You have to open the link twice (or several times) for some reason to view the property Probably a bug from temporary delisting after canceling all my upcoming reservations. Darn auto-cancel messages, RIP my reviews section