Airbnb more profitable than traditional renting in Vancouver, finds study

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VANCOUVER (NEWS 1130) – As people in Metro Vancouver continue deal with a lack of affordable options when it comes to rental housing, a new study confirms it is more profitable for landlords to move away from traditional rent and toward Airbnb if they want to maximize their returns.

The research out of the UK finds a major difference in profits between the short-term and traditional longer-term rentals.

British real estate agency Nested calculates the average price of a standard three-bedroom home in Vancouver at just over $1.1 million. It finds a landlord would be able to pay off that home in 214 months using Airbnb, which is 100 months faster than with the usual yearly tenants.

An owner could make around $2,000 a month more using Airbnb over long-term rentals.

“I have been surprised by how many hosts seem to be able to make more money on Airbnb than rentals. But it does look like if you rent a home through Airbnb through prevailing rates in Vancouver, you might do well considerably better than renting it out on the market,” explains Tom Davidoff with UBC’s Sauder School of Business.

Using the short-term rental service though is still less profitable than it is in many of the other 75 cities studied.

Overall, when it comes to how long it will take to pay off that home, Vancouver ranks 68th on that list, which is topped by Durban, South Africa, Lagos, Nigeria and Egypt’s capital, Cairo.

The study assumes properties would be rented at 80 per cent capacity each year.

Last September, Vancouver Mayor Gregor Robertson announced the city would be specifically targeting anyone who put their place up for rent through services like Airbnb with new proposed regulations to help increase the near-zero per cent rental vacancy rate.

The laws say people will have to get a business license to offer short-term rentals (less than 30 days) in principal homes, whether they are owned or rented and renting out non-primary residences will be illegal.

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