Vancouver, British Columbia has been known as a tourist magnet because of the picturesque attractions and panoramic views it offers. While skyscrapers and modern innovations have turned the area into a highly urbanized city, it was still able to preserve the beauty of nature. This is why Airbnb became immensely popular in the area.
With this innovation founded in 2008, tenants can enjoy the comfort and luxury of renting out spare rooms and the practicality of the accommodation. So if you decide to invest in Vancouver, British Columbia Airbnb real estate, you need to do due diligence in obtaining information.
Airbnb has been one of the most preferred accommodations of tourists and locals alike. Before the global pandemic, Airbnbs in Vancouver, British Columbia were booked solid on any given night.
With a surge of guests wanting to stay in this type of accommodation, it is not surprising that most real estate investors are making the switch. Instead of traditional renting, these investors are more interested in Airbnb. However, this move might not be for everyone. Before you make a decision, you have to weigh your options equally.
Should I buy a property for an Airbnb Investment?
When it comes to buying a property for your Airbnb investment, there are things to take into consideration. Aside from the price, you will also need to consider the size and location as they play a major role in how successful your rental property can be.
Profit Potential
The decision-making process will depend on the potential of your property to make a profit. You can use an online calculator to find out about your potential earnings. Of course, you also have to keep in mind that the numbers you will get from the online calculator is just a rough estimation, but it can give you a good idea of determining whether or not buying a property for Airbnb in Vancouver is a good investment.
Type of Property
Once you begin your search, you should know the type of property you are looking for. Do you prefer an apartment, house or condo? You will know the best type of property for Airbnb investment if you consider putting yourself in your guests' shoes. In the Vancouver area, ask yourself what visitors are coming for. Is your property going to be family-friendly? When you get into your guests' mindset, you can come up with ideas on how you can make the most of your investment.
Accessibility and Location
The location is another determining factor of any real estate investment. You have to know the best location for your Airbnb investment to ensure it becomes a profit-making machine. Some of the important features you have to check are the neighborhood, location's accessibility, location within the city and more.
Competition
Doing a quick search will give you some insights on Vancouver's rental market. If the competition is stiff, you have to search for a property that offers something special. Finding a sweet spot will not only make your property stand out, but will also give you more opportunities to earn.
Expenses
Buying a property requires maintenance so you can preserve its value. The upkeep and expenses should also be factored in before you make a decision. Some of the expenses of owning an Airbnb property includes paying taxes, mortgage, insurance and even repairs. Depending on your city, Airbnb also charges hosts 3% fee.
Rules and Regulations
Short-term rental regulations and by-laws should also be put in place.
- Short-term rentals refer to rentals with a duration of 30 days or less.
- Airbnb rentals can only be operated in the host's principal residence or the place where you reside the longest.
- The property must also be a legal dwelling unit or a property with an address that meets all application regulation including fire safety and building code.
- The investment needs to have a short-term rental business licence.
- For hosts that renting the property, the landlord should allow you to sublet your space as a short-term rental
- If you live in strata, the by-laws of strata should support the short-term rentals in your condo or building.
Cost of running an AirBnB
Even if your home provides you a comfortable stay, it is not designed to accommodate guests. That is why buying another property for an Airbnb is the way to go. Separate property for your Airbnb business gives you the freedom to redecorate the space. Of course, you have to make sure that the property is presentable.
With the competition among Airbnbs getting tougher and tougher each day, you need to stay in the game by offering something that visitors will always be interested in. If you are going to calculate the cost per bedroom, you need at least $1,500 to offer a presentable space for short-term rentals. As for the rest of the house, you need to fork out $3,000 to ensure comfortable accommodation.
It is also necessary to have basic equipment as most Airbnb properties have modern facilities. Basic equipment includes WiFi network, smart TV, toiletries, pantry staples like pepper, condiments and salt, digital keyless entry system, and many others. The more amenities you provide, the more guests you will attract.
Photos are also essential in setting yourself up for success. Professional photographs matter because they speak volumes. Expect to send around $100 to $200 for professional photography. This way, customers who check your listing will have an idea about what exactly your property looks like.
The costs of an Airbnb investment is not only intended for beautifying your property. As part of protecting your investment, you also have to make sure that you have all the necessary paperwork. In the event your guests fail to show up, being on the right side of the law will keep your business running.
Take the time to research about legalities and requirements you have to meet. Some cities may require you to inform the city before you decide to rent out your property. Homeowners associations also enforce by-laws and regulations that you should also check as they can save you headaches and disputes later.
Do not forget the liability insurance when venturing into a short-term rental business. The liability insurance can provide up to $1 million depending on the restrictions and the type of claim you submitted.
It is also worth setting your expectations because you cannot always expect to generate profit. There are peak and off-peak seasons. There are days when you will be making more money, while there are also days where you will earn less. It is necessary that you are well prepared for these situations.
Pros:
1. More profitable than traditional leasing
Airbnb is a more lucrative choice because this option charges on a nightly basis. So for instance,you are renting out a single family home in the Vancouver real estate market, you can generate as much as $2000 in 10 days. If your unit has a 50% occupancy rate, you can still earn a gross monthly income of $3000.
2. Buying an Airbnb property is not necessary
Did you know that you can make money without purchasing a property? You can lease or rent out a property and with the owner's permission, list it on Airbnb. All you have to do is to pay the homeowner with the fixed monthly rental rate. The money you make from converting the property into Airbnb is all yours.
3. Flexible
Airbnb also provides you more flexibility because you have the option to block off dates in the event the property is not available. The flexibility gives you freedom to use the home for family use or for undertaking a renovation project.
Cons:
1. Higher Expenses
Before you can attract potential guests, you still have to invest your money upfront to ensure your Airbnb property looks classy and presentable. It is not enough that you purchase a property because you also have to purchase furniture, decor, appliances and even high-quality beds. You also need to make sure that you have modern facilities to make your accommodation convenient and comfortable.
These facilities include Wi-Fi, free cable TV, and many others. You will also need to hire a professional cleaner or property management service to maintain the unit. There are additional costs for licenses and insurance as well.
2. Labour Intensive
The profitability of your Airbnb property depends on how you present it to your guests. If it looks dirty and unorganized, customers will not book your unit. Airbnb should be equipped with an alarm system, parking area and even household appliances. You also need to constantly adjust the rates depending on the season.
After each guest leaves the property, you will also have to clean the room to prepare it for the next guest.
3. Bad Reviews Can Affect Future Bookings
It is important that you maintain a good reputation because potential customers read reviews before they book a room. If your Airbnb property has more bad reviews than good ones, expect sales to drop. You will need to make the best first impression so you will continue to attract guests.
How To Make The Most Of Your Airbnb Real Estate Investment
1. Give your listing its own identity
It is not enough that you list your Airbnb property because it is not just a rental but a destination. Give potential customers great reasons to choose your property by making your listing unique and exceptional. Add charm to your property by displaying collections of paintings. The uniqueness of your property is another plus factor that can make the experience of your guests even more memorable.
2. Find out about the average occupancy rates and rental income
It is important that you have an idea of your return on investment before you decide to put up an Airbnb. You should check the location if it receives traffic from Airbnb users. This can be done by searching Vancouver Airbnb real estate investment property. You have to know the average rental income in that area and the property's predictive analysis.
You should also know the average Airbnb occupancy rates and the type of property that correlates with the rental income and the occupancy rate. You may check how your competitors are performing so you will understand Airbnb's income potential.
3. Establish a strong profile
Add professional photos, detailed descriptions,s and clear rules to your profile so prospective customers will have an idea about your property. Photos attract customers so be sure that you update your photos if necessary. Aside from taking photos of the interior and exterior of your property, you should also take photos of small details such as a cup of coffee and a jar of cookies next to your fireplace. Photos are worth a thousand words so be sure to tell an interesting and engaging story.
Reputation is also essential in building a digital footprint. Customers prefer Airbnb properties with good reviews so you need to provide a memorable experience to your guests.
4. Set a reasonable price
Regardless of the season, you have to make sure that your price is not too high because you are less likely to be chosen if your rates are higher compared to your competitors. However, if you have collected a lot of positive reviews for your excellent service, start raising your rental rates.
5. Keep the property clean
Positive reviews are given to Airbnb properties that consistently provide exceptional service to customers. Amazing services include having clean and well-maintained property. Nobody wants to stay in an old and dirty property. Customers are looking for comfort and if you provide it, they will not only choose you for their next booking but also recommend you to their family and friends.
The Bottom Line
A Vancouver Airbnb real estate property is a serious investment. You need to be knowledgeable about the proper way of running this type of business to stay on track. With the wealth of information, you can obtain online, you can make this investment success so long as you stay consistent.
To find listings in Vancouver BC with AirBnB potential contact us today for a custom list of all the top properties for short-term rental.
https://www.searchbcrealestate.com/