With graduation season in full force, travellers turn to Airbnb
Toronto is home to innumerable international students and graduation season is upon us, but hotel room prices in the city are exorbitant.
So many graduating students’ parents are turning to Airbnb rentals, of which the city is replete,
Simeon Papailias, managing partner of The Real Estate Centre, says Airbnb landlords are cleaning up.
“Toronto is an extremely busy city with three major international universities—Ryerson, University of Toronto, and York—and there’s an influx of people coming in for graduation,” said Papailias. People are also coming in to check out universities to send their kids to. It’s an intense market for Airbnb.”
Toronto is firmly enmeshed in the global pantheon of cities and, as a result, the city’s tourism industry is booming. The city’s international profile also received a major boost from the Pan Am and Invictus Games.
“We have a tremendous amount of tourism on top of the pent up demand from the international student community with all the events from the universities,” said Papailias. “Tourism in Toronto is extremely high and the numbers are ever-growing.”
The average downtown rent is in the neighbourhood of $2,000 a month, but turning an investment property into an Airbnb can fetch as much as $150 on a nightly basis. Moreover, given the excessive prices charged by hotels, the Airbnb rental is quickly becoming a popular business model for Toronto investors.
“It acts like a hotel without the overhead of a hotel,” said Papailias. “It’s an online booking service you’re going to run as a business, so the profits are huge and the overhead is tremendously low.”
Tourism in the Toronto region is at an all-time high, and Niagara Falls has become a destination for both Torontonians and those from far and wide, including beyond Canada’s borders.
“I know a few investors who have bought places specifically to rent through Airbnb and a lot are in the Niagara area because it’s perfect with its high demand, low supply, and its tourist model,” said Paul D’Abruzzo, an investment advisor with Rockstar Real Estate. “There’s a lot of potential for more revenue with the same square footage. You can generate $2,000 a month from a single-family home, but if you rent it on a short-term basis on Airbnb you can generate $4,000. So the business model is excellent.”
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Neil Sharma is the Editor-In-Chief of Canadian Real Estate Wealth and Real Estate Professional. As a journalist, he has covered Canada’s housing market for the Toronto Star, Toronto Sun, National Post, and other publications, specializing in everything from market trends to mortgage and investment advice. He can be reached at neil@crewmedia.ca.
