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Are the new short-term rental rules going to affect the condo prices?

Zeiss

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#1
Will the new rules prohibiting short term rentals make the owners of thousands of condos sell them at once and thus affect the prices negatively ? Sudden large supply + tighter mortgage criteria may not just regulate the prices but can make them plummet.
 
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#2
Will the new rules prohibiting short term rentals make the owners of thousands of condos sell them at once and thus affect the prices negatively ? Sudden large supply + tighter mortgage criteria may not just regulate the prices but can make them plummet.
Hello - can you share the new rules for Toronto?
 

DSC

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#4
This is coming to Council in a week or so: http://app.toronto.ca/tmmis/viewAgendaItemHistory.do?item=2017.PG24.8

Even if the City passes these proposed Rules you need to remember that each Condo Corporation probably has its own Rules about leasing. In mine a lease must be a minimum of 1 year, I know of many where it is 6 months.
Hi DSC,

Thank you for the info - in your opinion will this impact regular homes that are being listed in airbnb as well?
 
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#6
Will the new rules prohibiting short term rentals make the owners of thousands of condos sell them at once and thus affect the prices negatively ? Sudden large supply + tighter mortgage criteria may not just regulate the prices but can make them plummet.
Why would prices plummet? Owners can rent units out in the traditional rental market, which is robust.
 

Zeiss

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#7
Why would prices plummet? Owners can rent units out in the traditional rental market, which is robust.
There are hundreds if not thousands condos rented at very high rents to people who then rent them on short term, /2-3 days/, now with the new requirements the person running this enterprise would need to get permit from the condo management, which is impossible to get. So, very soon there will be lots of vacant condos for rent. Until now this was kind of under the radar. In buildings like ICE tower where short term rental is maybe quarter if not third of all units, the management started to take measures against it. Before the new rules there were 4-5 condos for sale in this two buildings, now there are about 20 new listings. Is this coincident?
 

Avenue

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In buildings like ICE tower where short term rental is maybe quarter if not third of all units, the management started to take measures against it. Before the new rules there were 4-5 condos for sale in this two buildings, now there are about 20 new listings. Is this coincident?
The prices are mainly pushed up by speculation, and those units typically just sit empty anyway, without going in the airbnb pool. As for your evidence it's only one data point and may very well be a coincident or temporary.
 

Zeiss

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#9
The prices are mainly pushed up by speculation, and those units typically just sit empty anyway, without going in the airbnb pool. As for your evidence it's only one data point and may very well be a coincident or temporary.
Don't get me wrong, I'm hopping that the prices are steady, I have a condo on Queen's quay and Bay street, on top of that next year getting another at Q.q. and Sherbourne, for me it would be very bad if prices go down.
 
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#10
There are hundreds if not thousands condos rented at very high rents to people who then rent them on short term, /2-3 days/, now with the new requirements the person running this enterprise would need to get permit from the condo management, which is impossible to get. So, very soon there will be lots of vacant condos for rent. Until now this was kind of under the radar. In buildings like ICE tower where short term rental is maybe quarter if not third of all units, the management started to take measures against it. Before the new rules there were 4-5 condos for sale in this two buildings, now there are about 20 new listings. Is this coincident?
- Hundreds or thousands of condos being used as airbnb apartments...I agree, it could easily be more than that. But what about context?




According to the City in 2011, there were 484,000 condo units, one quarter of which are rented. What proportion of the whole market is Airbnb'd? 10% of rentals? That's only 12,200 units, or about 2% of total condos in Toronto. Not enough to move the market.

Even if there are tens of thousands of air bnb units, I have to ask...what are the owners' expenses? If they bought the condos years ago, then their breakeven cost (mortgage, property tax, utilities) isn't that high. And the regular rental market is robust.

Lastly, airbnb units have high rents, but also high vacancy, and high cost to service (cleaning personnel, etc).
 
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#11
- Hundreds or thousands of condos being used as airbnb apartments...I agree, it could easily be more than that. But what about context?




According to the City in 2011, there were 484,000 condo units, one quarter of which are rented. What proportion of the whole market is Airbnb'd? 10% of rentals? That's only 12,200 units, or about 2% of total condos in Toronto. Not enough to move the market.

Even if there are tens of thousands of air bnb units, I have to ask...what are the owners' expenses? If they bought the condos years ago, then their breakeven cost (mortgage, property tax, utilities) isn't that high. And the regular rental market is robust.

Lastly, airbnb units have high rents, but also high vacancy, and high cost to service (cleaning personnel, etc).
Hello,
I am a house-owner in Toronto and i am waiting to get my permits ready to renovate my property. In the meantime my property is listed on airbnb. So i can give you some insight into the costs.
Given that my place needs a good investment right now it does not get premium prices so i charge 50-70 per night plus a 20$ cleaning fee. The occupancy rates have been between 60-80% and November really slow.
It takes a lot of effort and coordination between changeovers and the cleaning fee doesn't always cover the proper cleaning time/cost of the changeover.
Linens and laundry are very time consuming.
But with that said, airbnb has covered about 70% of the carry cost for 5 months of activity(mortgage, utilities etc)

Condos would be easier to maintain on airbnb, but you run into the condo rules and short term renting problem.
id be happy to answer any questions.

Cheers
Ed
 
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#12
Hello,
I am a house-owner in Toronto and i am waiting to get my permits ready to renovate my property. In the meantime my property is listed on airbnb. So i can give you some insight into the costs.
Given that my place needs a good investment right now it does not get premium prices so i charge 50-70 per night plus a 20$ cleaning fee. The occupancy rates have been between 60-80% and November really slow.
It takes a lot of effort and coordination between changeovers and the cleaning fee doesn't always cover the proper cleaning time/cost of the changeover.
Linens and laundry are very time consuming.
But with that said, airbnb has covered about 70% of the carry cost for 5 months of activity(mortgage, utilities etc)

Condos would be easier to maintain on airbnb, but you run into the condo rules and short term renting problem.
id be happy to answer any questions.

Cheers
Ed
Thanks for sharing.

I'm surprised you can't get more $$ for a whole house rental?

If you were to rent the place out on the regular rental market (1 year lease, month to month thereafter), how would the rent compare to the carrying costs?
 

MikeWang

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#13
Hey guys, our condo on Bay street doesn't allow long term rental to unrelated tenants anymore, what's your take on this?

This building is cracking down on short term rentals, this is fully justifiable. But the fact that they don't even allow friends to share a unit is just absurd.
 

DSC

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#14
Hey guys, our condo on Bay street doesn't allow long term rental to unrelated tenants anymore, what's your take on this?

This building is cracking down on short term rentals, this is fully justifiable. But the fact that they don't even allow friends to share a unit is just absurd.
You need to look at your Declaration and Rules to see what your Board is ALLOWED to do (or MUST do, they are legally obliged to enforce the Declaration and Rules). These MAY say something like "Each unit shall be occupied and used only as a private single family residence and for no other purpose" How do they decide that someone is a 'friend' rather than 'family' ? There may/probably are also "occupancy standards" noted in these documents, something like not more than 2 adults per bedroom. Stopping short-term rentals (if prohibited in your Declaration/Rules) makes perfect sense but forbidding a couple of un-related people to share a Unit seems impossible to me and almost impossible to enforce.
 
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#15
Thanks for sharing.

I'm surprised you can't get more $$ for a whole house rental?

If you were to rent the place out on the regular rental market (1 year lease, month to month thereafter), how would the rent compare to the carrying costs?
Hello,

Apologies for the delayed response.
The upper beaches area house 1 br 1 wr w parking about 1600 I'd say. It's a small bungalow...
So with airbnb you can gross around 2300 if the house is in good conditions and offers great guest experience.

My place falls more into the basic necessities category- but I need to say for Toronto getting a place with parking (that costs 20 a night easy) at 60 a night... Is a steal
But guests are always right I guess..
That was my rant

Cheers
Ed