Airbnb vs Renting Out Your Home: Which is Better?
Airbnb listings skyrocketed as people heard of the income potential of renting your home while you are not using it. Before choosing the Airbnb platform to rent your space, there is much to consider beyond the revenue-generating aspects. We’ve compiled the information you need to make an informed decision about renting your property on your own or using the Airbnb model.
Rental Income
Owning a property can provide a good source of income. Whether you’re looking to be one of the many long-term houses for rent or are looking for something short-term, the property provides value.
Renting out your property on your own can give you peace of mind knowing that you have tenants in your home for an agreed-upon amount of time, helping you budget and plan your life.
If a tenant doesn’t pay and you don’t have a platform to help you get your payment secured, you can proactively hire a property manager.
When providing a house for rent on your own, you are limited to a single monthly payment rate, whereas at Airbnb, you can have different rental prices per week. Your earnings could be significantly higher if you opt for the latter. However, your costs could be significantly higher when it comes to: wear-and-tear; turnover costs; cleaning; legal; … the list goes on.
You will need steady vacationers or short-term renters to guarantee the difference in higher revenue from Airbnb; you need to be mindful that there are fees associated with the platform and service that will take a chunk of your earnings. And … not ever home and its location makes it vacation home worthy.
Rules and Regulations
Whether you rent your property on your own or through Airbnb or using the valued expertise of a licensed property management company, there are regulations. Early in 2020, the Alberta courts made a decision that prevents condominium owners from using their units as short-term rentals for websites like AirBnB & VRBO. Owners who use those services to get sort-term “renters” are considered the same as running a hotel.
It is extremely important that you check your local laws and regulations before jumping into the vacation rental world to make sure that you don’t get yourself into trouble!!
Vacation vs Traditional Rental Insurance
A short-term (vacation) rental is less than 28 consecutive days, putting Airbnb rentals in this category. Vacation rentals may be your owned houses for rent, or another type of property like a guest house in your yard.
Each of the above options requires different types of insurance. You will want to obtain vacation rental insurance before you begin renting out your home. If you don’t disclosure that you are renting your property as a vacation rental, you may not be covered in the event of a loss.
Rental property insurance is important for both renters and tenants to have. Speak to an insurance broker before renting on the platform or your own. Rental insurance covers the property, rental loss (in the event of an insured loss) and your mortgage payments.
Short-Term and Traditional Rental Tax Considerations
Tax stipulations and price increases can vary from province to province. Speaking to a tax expert about what to expect when renting your property is important regardless of how you choose to offer out your property.
What Should You Choose?
Renting out your home long-term can provide you with a stable, steady income that helps cover your mortgage and expenses. A short-term offering could be a way to increase your revenue, helping you cover expenses.
Make Your Home Work for You!
No matter which option you choose for your home or apartment, you can rely on Emerald Management & Realty to help you with property management and property investment goals. We pride ourselves on being available to our clients 24 hours a day, seven days a week. Your property matters to you … and that matters to us!
To learn more about making your home work for you, call us at 403-237-8600 to discuss the current market and your options … or contact us online today!
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