Airbnb vs. Renting in Canada: Which Strategy Is Better for You?

If you own a home or apartment in Canada, there are two main options for renting it out: short–term rental, listing it on sites like Airbnb, or a long-term residential rental property. Both approaches have pros and cons, but which is right for you?

In this blog, we’ll compare different aspects of putting your house on Airbnb vs renting in Canada to help you decide which strategy best fits your property.

Airbnb vs. Renting in Canada: What Is the Difference?

While both ways of renting out your property involve temporarily allowing renters to occupy the unit in exchange for payments, these strategies have a few key differences.

Long-term rentals are considered a traditional form of housing when landlords make their properties available to tenants for at least six months with a binding lease agreement. In Canada, one-year lease terms are most common for long-term rentals.

On the other hand, sites like Airbnb and its alternatives in Canada offer property owners an effective way to earn passive income from real estate without the commitment of a long-term lease agreement. Airbnb functions as a short-term vacation rental platform. Properties listed there are generally rented out to travelers looking for a place to stay anywhere from one night to one month.

Potential rental income

In the case of long-term renting, landlords must follow the terms of the lease agreement and may not change their pricing on the spot. You can’t adjust your rates throughout the year to match the market demand or peak season until the current lease ends. Besides, long-term residents expect to pay much less than travelers would on their vacations.

If you own a property in a popular tourist destination in Canada and want to make some extra cash, starting an Airbnb is a great way. Your earnings can be significantly higher than traditional renting because Airbnb hosts can be more flexible with their pricing. You can set different rates depending on the day of the week and season.

The best way to get your Airbnb pricing strategy right is to use a dynamic pricing tool. It will recommend a price for your listing based on current market trends, such as supply, demand, seasonality, events, holidays, and days of the week. This approach will allow you to maximize your revenue.

Time spent managing the property

Managing long-term rentals requires less time than managing Airbnb properties. Once you find a tenant, there is little left to handle, although some work is needed to manage repairs and maintenance and deal with tenant inquiries and concerns.

If you do everything yourself, managing a vacation rental property can be time-consuming and often feels like a part-time job. But if you automate your hosting routine using vacation rental software like Hospitable, it will save you a lot of time that you can spend on doing things you enjoy.

Upfront costs and maintenance

With traditional renting, there are typically much fewer upfront costs involved than hosting on Airbnb. You don’t have to invest in furnishing and decorating your entire home. Your renters will be primarily responsible for maintaining the property and will take care of your home and garden. But you’ll have to deal with emergencies and make repairs and fixes when necessary.

An Airbnb rental requires higher upfront costs because you need to fully furnish your property and invest in home décor, quality bedding, kitchen appliances, and other Airbnb essentials to ensure comfortable stays for guests. Ongoing expenses of running an Airbnb are also higher as you need to ensure that your STR property is always in perfect condition.

Rules and regulations

Traditional renting In Canada is permitted in most situations, although landlord and tenant regulations vary by province. Some common rules include the requirement for a written lease agreement, limitations on rent increases, and tenant privacy rights.

Airbnb regulations in Canada are not as strict as in some other countries, but they also vary from location to location, and some local governments have issued rules that limit short-term rentals. In many cities, zoning laws prohibit short-term rentals from operating in certain areas. If your city allows short-term rentals, you may be required to register and apply for a permit or business license. Hosts in Canada also have a responsibility to file and pay Airbnb taxes.

Stability

The major advantage of traditional renting is that you have the protection of a long-term rental agreement that ensures you receive consistent rental income every month, no matter the season. Residents usually pay for their utilities, such as gas, water, electricity, and WiFi.

Vacation rentals rely heavily on the tourist seasons. Depending on the popularity of your location, your Airbnb will likely have an “off-season”—a time of the year when keeping your property booked can be hard. While you can adjust rates to remain competitive in a slow season, rental income isn’t guaranteed if you market your vacation rental property only on Airbnb.

You should create listings on other major OTA platforms, such as Vrbo and Booking.com, to reach a wider audience and diversify your booking sources. This can help ensure that your income remains consistent throughout the year. If you want to maximize your revenue, you should also create a direct booking website that will allow you to establish strong relationships with guests and drive repeat direct bookings.

If you opt for Hospitable, you can easily create a professional direct booking website using our dedicated service, Hospitable Direct. We’ll list your property on Google Vacation Rentals so travelers can find and book your rental when they use Google to search for accommodation for their upcoming trips.

Flexibility

While a long-term lease can be excellent legal protection and guarantee you reliable income, it can also significantly limit what you can do with your property. You don’t have the option to make your home unavailable all of a sudden, which means you can’t rent it out on a “part-time” basis.

Airbnb owners have greater freedom—you can rent out your property for as little or as long as you want. For example, you can rent out your own home when you go away for a vacation. If you rent out your holiday home, you can block off the dates in your Airbnb calendar when you want to stay on your property.

Airbnb vs. Renting in Canada: What Should You Choose?

When choosing between Airbnb vs. renting in Canada, both strategies have advantages and disadvantages. If you own a house in a popular tourist destination, renting it out as an Airbnb is likely more profitable than traditional renting. If you want a stable income for a long time, listing your property as a long-term rental would suit you better.