The popularity of short-term rentals has been increasing over the last decade as a way of building wealth and entrepreneurship, especially in tourist-heavy places. You’ve probably heard buzzwords like “Airbnb arbitrage” where people rent out the apartment that they rent.
Just know, most of what you see online to this effect is coming from the US and we have more stringent rules when it comes to short-term rentals in Canada. That doesn’t mean there aren’t some great benefits to short-term rental properties though, so let’s check them out!
In Ottawa, Airbnbs technically have to be owner-occupied homes. This means that you can’t technically buy a property as a rental, pay 20% down, and expect to be able to Airbnb it right after. Instead, you have to register the property as an owner-occupied home that you live in and can then go through the Airbnb hoops down the road.
There are a lot of rules surrounding this stuff including municipality and possibly condo board rules that you’ll need to navigate. Some condo boards outlaw the ability to host short-term guests, so you’ll want to look at the rules before you buy. To proceed with your short-term rental, you’ll have to:
- Be at least 18 years of age
- Fill out a Short Term Rental application
- Have proof that the property is the principal residence of the host
- Provide a floor plan including the square footage and number of bedrooms
- Provide proof of insurance
- Sign a declaration confirming compliance with the local bylaws
- Submit this to the City and pay the $110 fee
When it comes to using your property as a short-term rental property in Ottawa, there are several benefits. The main benefit of being able to make rental income is obvious but there are lots of other advantages too!
- Flexibility
Short-term rentals offer flexibility in terms of when you want to use your property. You can block off certain dates for personal use while renting out the place during other periods. This flexibility allows you to enjoy your property while still generating additional income.
- Higher occupancy rates
Ottawa attracts many tourists, business travellers, and government officials throughout the year. As a result of the higher demand for short-term accommodations, you can earn a higher rental income compared to some traditional long-term rentals. A consistent flow of guests equals a consistent flow of income.
- Increased property value
Renting out your property as a short-term rental and maintaining it well can increase its value over time. A well-maintained and profitable short-term rental property can be an attractive asset when it comes to selling in the future.
- Property management options
If you prefer not to handle the day-to-day management of your rental, you can opt to use a property management service. They can take care of guest bookings, cleaning, maintenance, and other tasks, allowing you to enjoy the benefits of rental income without the associated responsibilities.
- Tax advantages
Renting out your property as a short-term rental can also provide you with certain tax advantages. You may be able to deduct certain expenses such as maintenance, repairs, utilities, and even a portion of your mortgage interest. Consult with a tax professional to understand the specific tax benefits in Ottawa.
Before looking at a property and starting your short-term rental business, it’s essential to familiarize yourself with everything that goes along with that. Contact the Kyle Miller Mortgage Agent team today to learn more about the local regulations, what you can and can’t do, and what we can do for financing!
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