Are you interested in achieving financial independence through passive income? Here’s a disclaimer: you don’t need to own a property to start the Airbnb rental arbitrage business! In this article, we featured the entire process of Airbnb rental arbitrage in Ottawa, its profitability, along with the best areas and neighborhoods. Continue reading to learn more about short-term regulations and ways to convince landlords to sublet properties for rental arbitrage!
Rental Arbitrage is a way to start an Airbnb business with no money. By convincing landlords to lease you a property, you can furnish and sublease it on Airbnb and VRBO. No need for you to buy a property!
It is perfectly legal and is a proven scalable business model. In my podcast, I have spoken to various entrepreneurs doing Airbnb arbitrage full-time.
Here’s a proof! In Ottawa, Lisa manages 25 listings and I’m pretty sure she doesn’t own all the properties. She made C$667,178 in the last 12 months.
Before you dive in and start putting out your hard-earned money on a property, it’s important to know how much profit you can make. For instance, the best neighborhood to invest in is Lower Town, located in the K1N district, which is generally home to affluent young professionals in Ottawa.
Since this neighborhood is centrally located and accessible to tourist areas, it has had an exceptional rental demand over the years!
Based on Airbtics’ data, you can earn a whopping C$2,907 per month for a 2-bedroom apartment in Lower Town alone. With the data provided, you can certainly tell that investing in a property in Ottawa is profitable!
Average Rent Price | Airbnb Monthly Revenue | Monthly Expense | Monthly Profit |
---|---|---|---|
C$1,825 | C$2,907 | C$581 | C$501 |
Source: Airbtics dashboard
The monthly profit can be calculated by subtracting the Airbnb monthly revenue, the rental price and the monthly expenses (C$2,907-C$1,825-C$581 = C$501).
Now that you have an overview of how much your monthly expense and revenue is, let’s talk about the start-up cost! How long does it take for an investor like you to get back the startup cost? Let’s take a look at this calculation:
Total Startup Cost (Average startup cost + 2 months rent price) | Cash Return Time |
---|---|
C$5,650 | 11 months |
The average estimated startup cost (for furnishing) in Ottawa is around C$2,000. To compute the total startup cost, it is necessary to add the 2 months of average rent price (C$3,650). Now that we have a total startup cost of C$5,650, cash return time can be calculated by dividing this by the monthly profit (C$501).
Given your monthly revenue of C$501, it will take approximately 11 months time to get back the startup cost! In such a short period of time, you can already expect profit and consider starting your second unit for rental arbitrage. If this sounds promising to you, then go ahead and look at the other best areas for rental arbitrage in Ottawa!
Before investing in a particular area in Ottawa, you have to take a look at the top markets and number of listings to set your expectations towards success. Check out the top 3 boroughs in Ottawa ranked by their annual revenue, along with their occupancy & daily rates!
This neighborhood is one of the francophone areas in Ottawa and is also the least expensive neighborhood! Rental property investors who are looking for cash flow will discover great opportunities in Vanier. Here’s what you can expect in this neighborhood:
Type of Bedrooms | Average Rent Price (pcm) | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
---|---|---|---|---|
1-bedroom | C$1,040 | C$1,793 | 94% | C$109 |
2-bedrooms | C$1,600 | C$2,289 | 83% | C$173 |
3-bedrooms | C$2,023 | C$3,064 | 90% | C$173 |
According to our Airbtics Dashboard, there are more than 54 Airbnb listings with 40 entire home properties and 20 one-bedroom properties in this area. The monthly revenue for most properties in Vanier is more than C$1,580 per month with occupancy being more than 60%.
Considered as Ottawa’s entertainment centre, Byward Market consists of affordable properties and a vibrant neighborhood! The median rent for a two-bedroom apartment in this area is also 26% higher than the entire city of Ottawa. Here’s what you can expect in this neighborhood:
Type of Bedrooms | Average Rent Price (pcm) | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
---|---|---|---|---|
1-bedroom | C$1,675 | C$2,488 | 72% | C$127 |
2-bedrooms | C$1,969 | C$3,009 | 78% | C$153 |
3-bedrooms | C$1,900 | C$3,336 | 63% | C$191 |
This area has a total of 54 Airbnb listings with 7 condo properties and 22 one-bedroom properties. The monthly revenue for most properties in Byward Market is more than C$1,478 per month with occupancy being more than 51%.
Aside from this neighborhood’s low crime rate, it also has inexpensive properties and has barely tracked inflation. Here’s what you can expect in this neighborhood:
Type of Bedrooms | Average Rent Price (pcm) | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
---|---|---|---|---|
1-bedroom | C$1,400 | C$2,628 | 74% | C$128 |
2-bedrooms | C$1,825 | C$2,907 | 78% | C$188 |
3-bedrooms | C$2,300 | C$3,264 | 82% | C$217 |
This area has a total of 118 Airbnb listings with 15 condo properties and 24 two-bedroom properties in this area. The monthly revenue for most properties in Lower Town is more than C$1,662 per month with occupancy being more than 62%.
To begin with, it’s certainly important to be familiar with the Airbnb rules in Ottawa to make sure that your business will run smoothly. Here are some of the short-term rental regulations and laws to take note of:
To run an Airbnb rental arbitrage in Canada, you can look at property websites and get a grasp of the ranging prices in Ottawa:
Airbnb investment through rental arbitrage is one of the best strategies to have passive income. However, it could be a challenge to find a landlord that allows their property for subletting on Airbnb. You can also convince a landlord by following the rental arbitrage email template & be extra creative!
Here are ways how you can find landlords that allow Airbnb rental arbitrage:
Renters in the digital world who are looking for properties online can easily connect with landlords. Some of the most recommended online real estate websites which allow you to filter by city, state, or ZIP code are:
However, you can also find apartment & condominium properties online in the following websites:
There are numerous property owners who are leasing their properties and you can easily find them on Google & online marketplaces. Check out some of the most recommended marketplaces:
If you are currently renting a space or know someone who is, then it’s also recommended to speak with them. Start by asking if there are vacant rooms or properties and let them know about your intentions of putting them up for rental arbitrage. They might also be able to recommend neighbors or local friends who are also interested in this idea!
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