Until recent years, when considering investing in real estate, long term renting has been the primary option for most owners. While in most cases the rental income covers expenses, mostly it was about the building of equity. No longer is this the only option, and in fact some might argue it is now the least attractive route. Enter short term rentals. We sat down with Scott Clement of breathebnb Vacation Rental Management to dive in to their thoughts on the rising popularity, what investors can expect to earn on their rentals, and the misconception that short term renters treat properties more poorly than long term tenants.
Breathebnb hit the Ottawa scene in 2016, the first company of its kind in this area, and has since launched in Quebec, Muskoka, Prince Edward County, Calabogie, Kingston and Gananoque regions. Their units range from urban apartments to luxurious waterfront homes, and their homeowners are earning between 1.5 to 4 times more than a typical long term tenant would pay. The company recognized that not all homeowners would be happy simply building equity, and would need cash flow on top of it.
“When we began breathebnb,” Scott says, “Airbnb and other short term sites really hadn’t made much of an impact locally, but we knew the potential was there. Add to the fact that we’d always heard horror stories from homeowners coming back to a long term rental which was destroyed by its tenant, we knew there would be a market for this platform, with Airbnb’s free insurance covering most, if not all, of any potential damages. While the news loves to play up the parties and craze around Airbnbs, the fact is those are few and far between. We’ve successfully hosted thousands of groups these past 3 years and they’re all just like you and me, looking for a family getaway or taking a business trip.”
One attractive aspect to working with an experienced BNB manager is the fact that the homeowner can come with zero knowledge of the industry and receive dedicated support in purchasing and designing a suitable property, designing for optimum nightly rates and occupancy, listing online, working with guests, cleaning, and everything in between.
“Our goal is to achieve a scenario where our homeowner gets paid monthly and can relax fully in our care, trusting that we and our team of 35 are working tirelessly to earn them as much as possible, keep their property in excellent condition, and create a memorable experience for all their guests.”
So: let’s talk numbers. A strong portfolio is full of high quality and well-designed properties, which Scott advises can up to triple the earnings of an outdated property with no cohesive décor. Their team also includes an interior designer specific to short term rentals, which gives their properties an edge over the competition. Assuming the property is well located (but not necessarily just in a typical tourist area) and parking is included:
One bed unit can expect to gross $3 to $4k monthly vs Standard Rental $1.6 to $2.3k
Two bed unit $5.5 to $6.5k vs Standard Rental $2.2 to $3k
Three bed unit $6 to $7k vs Standard Rental $2.8 to $3.5k
Four bed unit $6.5 to $7.5k vs Standard Rental $3.5k+
The larger the home, the more important free onsite parking becomes. A waterfront property close to the city (Crystal Beach, for instance) could see a 30% increase on those numbers.
We asked Scott why homeowners would want to work with breathebnb, rather than hosting on their own and keeping all the income in their pocket. Scott laughs. “That is a question we get all the time. And you can tell the person asking it has probably never been a host, or at least not for very long. Aside from organizing cleanings, guest entries, responding to phone calls night and day, plumbing emergencies, etc, listing under our portfolio ensures repeat guests across properties, who are willing to pay more because they trust our name. We also earn almost double the short term rental average per property, because of our pricing strategy and Superhost status.”
Visit www.breathebnb.com for more details and to find unique rental units.
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