Select Page

Navigating the short-term rental market: Strategies for success

Share this article:

The Canadian short-term rental (STR) market presents a significant opportunity for real estate professionals seeking to expand their businesses within the sector. With the growth of platforms like Airbnb and Vrbo, the demand and opportunity for STRs have surged, yet the market requires strategic navigation amid rising competition and shifting regulatory environments.

Understanding the unique needs of short-term renters can benefit your business in several ways. Keep reading for guidance on excelling in the Canadian STR market by enhancing client experiences with the support of STR management services.

 

What’s in it for you?

 

By encouraging your clients to offer tailored experiences and amenities, you can increase their rental income and occupancy levels and reduce property downtime and wear and tear. 

Meeting the expectations of short-term renters can also help you to stand out among competitors and gain better market intelligence, leading to smarter property selection and marketing decisions on behalf of your clients. 

Additionally, understanding the dynamics of STRs keeps real estate professionals informed of current trends and developments in the industry, contributing to enhanced performance and improved financial outcomes.

 

Be vigilant and compliant with local laws and rules

 

Canada’s STR market is characterized by its regional variations, with unique trends and challenges. Major cities like Toronto, Vancouver and Montreal serve as prime examples of strong STR markets due to their status as tourist hotspots and business hubs.

However, the country’s STR markets are also subject to changing regulations and restrictions, necessitating ongoing vigilance and compliance with local laws and tax rules — and it can be tough to keep up.

 

What’s happening in local STR markets

 

For example, in the recent federal budget update, Finance Minister Chrystia Freeland introduced steps to eliminate income tax deductions related to STR income in regions where regulations are breached, yet concerns linger regarding its impact on easing housing strain. 

British Columbia and Quebec have enacted laws to oversee STRs, with the objective of re-integrating commercial units into the long-term rental sector and enforcing adherence via platform responsibility.

Nevertheless, the importance of continual surveillance, enforcement and adjustment of policies to uphold the stability of Canada’s housing market is stressed. These changes are the result of a rapid rise in the country’s STR market, with over 235,000 STR listings across platforms like Airbnb and Vrbo, equivalent to 1.4 per cent of the nation’s housing stock. This has raised concerns surrounding overall housing availability and a shortage of properties for those looking for more permanent residence.

B.C.’s newly proposed law seeks to confine STRs solely to a homeowner’s primary residence, intending to ease pressure on long-term housing availability. Consequently, property management enterprises (like Superhost of Victoria) are on the brink of closure, necessitating staff layoffs and substantial operational adjustments or even total closures.

These regulatory changes mark a notable transition in the STR sector, eliciting responses ranging from adaptation to opposition among stakeholders throughout B.C.

 

Consider unique renter needs and preferences

 

Short-term renters have unique needs and preferences that differ from long-term renters. They are often looking for a comfortable and convenient home-away-from-home experience, with amenities and services that cater to their short-term stay. The audience that looks for STRs will not be looking for hotel stays, so your clients need to understand what differentiates STRs from other rental options.

 

Choose profitable locations

 

Location is a critical factor in the success of any STR business, especially in the growing Canadian market. Consider working in areas with high demand for STRs, such as popular tourist destinations, business districts or neighborhoods close to major attractions. 

Within highly competitive urban markets, understanding what guests need out of their STR location will help with STR marketing. That said, rural areas are also sought after by tourists and those looking for weekend getaways. Knowing the unique selling points (USPs) of the STR location will help you and your clients maximize profits.

 

Tips for marketing STR properties effectively

 

Here are some things you can start doing today to improve your marketing of STR properties.

  1. Understand the unique needs of short-term renters, as this can lead to greater success for your clients. 
  1. Suggest profitable locations to your clients, such as popular tourist destinations, business districts or neighborhoods close to major attractions.
  1. Prioritize staying up-to-date with the latest regulations and advising your clients to comply with local laws to avoid legal issues and hefty fines. 
  1. Familiarize yourself with effective marketing strategies to attract potential guests to your clients’ properties and ensure they stand out from the competition. For example, create a compelling listing with high-quality photos and detailed descriptions, offer competitive pricing and leverage social media and online platforms to reach a wider audience to help your clients improve their online visibility.
  1. Encourage your clients to partner with property management companies to optimize their rental income, ensure compliance with local laws, provide a positive and memorable experience for guests, gain valuable market insights, diversify their STR portfolio and foster stronger relationships with guests.

 

Property management

 

Property management is a vital component of the STR market. Key benefits of hiring an external property manager include:

  • Compliance with regulations. Ensuring that clients remain compliant with ever-changing regulations and avoid costly penalties.
  • Maximizing returns. Optimizing rental income by monitoring pricing, maintaining high occupancy rates and controlling operational costs.
  • Guest experience. Delivering exceptional service to guests, resulting in positive reviews and repeat bookings.
  • Market research and pricing strategy. Offering valuable market insights and helping clients adapt their pricing strategy according to current conditions.
  • Diversification. Assisting clients in expanding their STR portfolios across multiple locations or property types, thereby reducing risks and securing stable revenue streams.

 

Real-life STR success

 

Successful STR businesses in Canada offer STRs in major cities, including Toronto, Vancouver and Montreal. These companies have unique business models that combine the convenience of a hotel with the comfort of a home. They provide high-quality furnishings, 24/7 guest support and seamless booking processes to provide memorable and hassle-free experiences for guests.

The key aspects that make such companies tick are their approaches to the STR market. STR businesses often provide an easy-to-use booking platform with similar convenience to booking a hotel. This makes it the ideal solution for those looking to book accommodation quickly, as it offers last-minute options for more spontaneous travelers, or those looking to rent a property for a short time while they settle into a new location. 

 

Through rigorous market research, optimal location selection, meeting the specific needs of short-term renters and implementing effective marketing and property management strategies, you and your clients can succeed in Canada’s STR market. Staying on top of regulatory changes and complying with local laws is paramount to building trust with communities and authorities alike.

 


Share this article: