Differences between Short Term Rental Vs Long Term Rental

Let’s first distinguish one from the other. As we all know, long-term rentals have been a traditional form of housing. They are offered to tenants who choose to reside on a property for at least 6 months with a binding lease agreement. Property owners decide to collect a higher rent than the mortgage to generate monthly income that remains unchanged regardless of the ever-changing economic circumstance.  

On the other hand, the setup for a short-term rental is renting out a property to visitors or guests for a very short period. It works pretty much like hotels where guests can stay in for only a couple of days. This can viably extend to weeks or even months. Short-term rentals offer a cozy atmosphere as well as significantly cheaper nightly rates compared to hotels. This is why guests keep coming back to short-term rentals. 

Since short-term rentals have become widely used all over the world, rental arbitrage is another popular trend.  It has given a lot of nonproperty owners a steady stream of passive income by simply re-renting a unit and listing it on Airbnb, VRBO, or HomeAway. This is a wise, effective, and legal income-generating hustle. Just imagine having a side income from a property that you do not own. 

Rental Regulations in Canada

Traditional rental

Rental regulations in Canada vary by province, but some of the common rules include the requirement for a written lease agreement, limitations on rent increases, and the right to privacy for tenants. Additionally, landlords are required to maintain their properties in a safe and habitable condition, and tenants have the right to request repairs or file complaints if necessary. By understanding the rental rules in Canada, both landlords and tenants can ensure a fair and transparent rental process.

Airbnb Regulations

To comply with the diverse short-term rental regulations across Canadian cities, it’s crucial to review each law and ensure your requirements are met. For a comprehensive understanding of the legislation and policies governing short-term rentals, we recommend checking out our previous article titled “Airbnb Rules in Canada.”

Advantages of Long-Term Rentals in  Canada:

Below are the advantages of operating a long-term or traditional rental property in Canada:

• Record-high population – Canada recorded its highest annual population growth rate at 2.7% for the first time last year since 1957. This was attributed to migration contributing at least 95% of the number of people increase.
• A steady stream of income – You are ensured to have a steady and regular monthly income immune to erratic economic conditions. The average monthly rent in Canada is $2,004.
• Steady operating costs – You do not need to shell out money upfront for furnishings since the tenants will most likely have their own.
• Laid-back management – You will have less interaction with your tenants, and you do not need to be hands-on with managing your property. This is risky, however, since damages on the property can get worse if they’re left unattended. 

Advantages of Short-Term Rentals in Canada:

On the other hand, here are the perks that short-term rentals can offer to Airbnb hosts in Canada:

• Positive growth in travel and tourism industry –  In the next ten years, the GDP of the local tourism sector is poised to increase by an average of 4.4% each year, which is more than double the 1.9% growth rate of the country’s economy as a whole. This growth is expected to bring the industry’s GDP to almost CAD213 billion, which constitutes 6.8% of the entire economy.
• Flexible pricing – You can adjust the nightly rate depending on seasonality or market demand.
• Experience managing the property – Building connections with people by hosting different guests. If this is not your thing, you can still manage the property remotely via automated management tools.
• Feel more control over the property –  Since guests only stay in for a limited time, you can easily make changes to your property. Without getting worse, any damages can be repaired in no time and also be covered by Airbnb insurance.