Toronto is the largest city in Canada, located near the picturesque Lake Ontario. It combines different cultures, architectural styles, and natural attractions, making Toronto one of Canada’s top travel destinations. People come from all over the continent, so the rental business is booming here.
If you want to start your business in Toronto, there are many details you should know. For example, features of local legislation, the average cost of renting a house or apartment in the city, and ways to optimize your business in Toronto (for example, using the MasterHost service: https://masterhost.ca/airbnb-management-toronto/).
Such services provide many valuable services for property owners: for example, assistance with obtaining the necessary licenses, services of a professional photographer, SEO optimization of ads, cleaning of premises, etc. It will help save time for business development and provide a high-quality service for your guests.
Top Benefits of Toronto for Airbnb Businesses
The main advantage of Toronto is diversity in everything. Here, a neo-Gothic castle is adjacent to skyscrapers, and cozy parks and embankments are adjacent to urban areas. Variety can also be seen in properties for rent:
- Many budget hostels
- Comfortable Bed & Breakfasts
- Private apartments for rent
- Luxury hotels
So the property owner will quickly find his target audience.
You don’t have to own a castle or a palace to become an Airbnb Super Host. The main thing is to be hospitable, take care of guests’ comfort, and follow this platform’s rules.
Airbnb puts forward the following requirements for property owners:
- 5-step cleaning after each guest. In its blog, the service provides tips and tricks for each item. However, many Hosts prefer to use the services of professional cleaners.
- Non-discrimination policy. The host cannot refuse a booking based on a guest’s race, nationality, or religion. However, if you live with guests in the same area, you have the right to accept people of the same gender as you.
- Effective management and communication with clients. The faster you respond to a potential guest and the fewer bookings you reject, the higher your rating.
It will be a great advantage if you are ready to provide additional services, adapt the space for people with special needs, or add a guide to your account.
The competition in Toronto is relatively high, but the wide variety of offers will allow you to find your niche and maximize your potential as an entrepreneur. Let’s talk more about rental business analytics below.
Key Performance Indicators of an Airbnb Business in Toronto
To assess the situation in the real estate field for short-term rental, you need to know the key indicators for this region. It will help to evaluate the level of competition, plan the potential level of profit, as well as understand which properties are most popular with clients.
The main indicators for the rental business are:
- Average daily rate (ADR). It shows the average annual cost of renting housing per day. It will help you form a competitive price for your listing. For Toronto, ADR is $175. The highest average rental price is in September ($195), and the lowest is in February ($131).
- Occupancy Rate. On average, 73% of properties are booked in Toronto. The peak of the tourist season is observed in August (93%), and the decline is in January (50%).
- Revenue. This metric shows the average rental income per month. Of course, this figure can vary greatly depending on the type of property, but it gives some idea of your estimated income and the payback period of your investment. In this case, it is $1,969
- Active rentals. It is the number of properties for rent. There are 9,982 such properties here.
Analytics also show that one-bedroom houses are in great demand. Most houses for short-term rent have internet, a kitchen, air conditioning, and heating. Parking is available only in 44% of properties, and swimming pools are found in only 14% of houses. So a swimming pool or hot tub presence will be your advantage over competitors.
Airbnb Business Regulation in Toronto
Under Toronto law, if the rental period is 28 days or less and involves payment, it is considered a short-term rental. It includes self-rental and Bed&Breakfast, but not hotels. Also, short-term rentals do not include accommodation that does not involve payment.
Property owners must be registered and pay 4% of their profits as council tax. A company that brokers short-term rentals must obtain a license.
How to get a business permit in Toronto
You can get a definitive answer to this only at the consultation of a lawyer. However, if you want to get some idea of what Airbnb business permissions you will need to obtain, then you should proceed as follows:
- Check which category the type of business you want to run falls into. As described above, if you intend to rent your accommodation to your guests for a fee of up to 28 days, this is considered a short-term rental.
- If your business requires a license, please contact the East York Civic Center. There you can read the licensing rules and apply them.
- If you provide additional services to guests, you should ask in advance if you need to obtain a separate permit for them.
- Check the taxes details that apply to your business in that municipality.
Please note that at each of these stages, there are nuances that are better clarified during a legal consultation. It will save you from unpleasant surprises.
Toronto is one of the largest tourist centers in Canada. It is a multicultural city with many natural and urban attractions, which attracts people from all over the world. Such popularity makes Toronto an excellent location for starting a profitable Airbnb business. However, before you invest in your own business and buy property in this place, you should study all the legal aspects of running an Airbnb business and think over a strategy for managing your property. This will provide you with a steady income from your vacation rental business.
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