Landlords recoup investments faster through Airbnb, study says

Owners of three-bedroom properties in Montreal, Toronto, and Vancouver can recoup their purchase price much faster through Airbnb over average rental rates, recent research revealed.

A study by British online real estate agency Nested ranked 75 cities around the world according to the time it took to recoup the average price of a three-bedroom property in their respective locales.   A higher ranking indicates a quicker return of investment through Airbnb.

Airbnb provided a faster return of investment for three-bedroom properties in all 75 cities except for Beijing, China, which placed last, the study showed.  Airbnb rates there would recoup one’s investment in 59 years and 6 months, versus 55 years and 10 months through average rent.

At 20th place, Montreal was the highest Canadian city in the list. The average cost of a three-bedroom property there stood at USD354,371. It takes six years and two months to recoup that figure through the average Airbnb rate (USD4,816 per month) compared to 22 years and 9 months for the comparable USD1,296 average monthly rate.

Toronto and Vancouver were at the bottom half of the rankings at 52nd and 68th respectively. A three-bedroom home in Toronto costs USD615,737 on average, Nested found.  It would take 24 years and 9 months to recoup that amount through USD2,073 a month. The Airbnb rate of USD4,577 would recoup the investment in 11 years and 3 months.

A three-bedroom home in Vancouver costs about USD865,344, Nested said. Airbnb’s USD4,037 rate would return that figure in 17 years and 10 months, versus the 28 years and 5 months of the average USD2,540 rent.

Durban, South Africa placed first, as it takes just a year and six months two recoup the average cost of a three-bedroom property there (USD94,343).

Nested found Hong Kong as the city with the highest average cost for a three-bedroom property (USD3.15m), followed by London (USD2.83m) and New York (USD2.17m).

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