With the many changes in local regulations impacting short-term rentals (STR) and Airbnb properties, you may be wondering where to go next. Over the last few years, Ottawa STR regulations have changed the landscape of short-term rentals and Airbnb properties. Many property owners who previously listed on Airbnb are starting to make the shift into the long-term rental (LTR) market. This is an excellent option as long-term residential rentals offer many potential benefits, making it ideal for those looking for more reliable and predictable rental income.
There are many differences between the two rental models, so it’s important to consider the different aspects of transitioning to long-term rentals. Once you understand these differences, you’re on your way to a successful transition!
Short-term Rentals vs. Long-term Residential Rentals
There are many differences in managing short-term and long-term properties. With the shorter rental period for STR properties, property owners must take a much more active role in the day-to-day operations. These often rent nightly or weekly.
There are frequent guest turnovers, resulting in an increased workload associated with cleaning and resetting the property between guests, as well as a greater volume of communication when handling inquiries, booking and liaising with each guest.
On the other hand, while long-term rentals require less day-to-day oversight, you will need to play a much greater role in the long-term management of tenant relationships, compliance, and property maintenance planning. Short-term renters have different expectations than long-term tenants. The regulations around these types of rentals also vary greatly.
Navigating Legal Obligations
When renting out your property long-term in Ontario, it’s important to thoroughly understand the Residential Tenancies Act (RTA), as it outlines all the legal obligations you have as a landlord. Not only are the rules during the tenancy different, but there are also different eviction processes should issues arise. You will also need to understand rent control policies. In Ontario, most long-term rental properties are subject to rent control laws that dictate how much and how often rent can be increased, as well as how it must be communicated to the tenant. You’ll also need to make sure you’re compliant with fair housing laws and non-discriminatory practices.
The taxation laws for long-term rental properties also differ from those of Airbnbs or short-term rentals. Before deciding to make the switch from Airbnb to long-term rental in Ottawa, you need to understand how your financial reporting and taxes will be impacted. You should seek advice from a professional accountant. By taking the tax laws into account, you ensure that your projections for the difference in income are accurate and feasible for you to maintain.
Keep in mind that while short-term rentals can sometimes earn a higher nightly income, it is not consistent and fluctuates over time or seasonally. Long-term rentals provide a more reliable income which can make financial and tax planning easier. Familiarize yourself with the different tax requirements to ensure your financial planning is accurate.
Benefits of Long-Term Residential Rentals
Long-term residential rentals offer many benefits for property owners. Once you’ve found qualified tenants, you benefit from consistent and reliable income every month. This makes financial planning much easier as you don’t have to worry about fluctuating income.
LTRs also remain occupied by your tenants, so you’re not stuck managing the frequent guest turnover that comes with running an Airbnb, like cleanings, managing bookings, restocking the Airbnb, guest communication and more. With long-term rentals, you build long-term relationships with your tenants and can rely on them to treat your home as their own.
Getting Support with Your Long-Term Rental
If you’re thinking about making the transition from STR to LTR, reaching out for support from a property management company can help you with a smooth transition. A property manager will have comprehensive knowledge of the RTA and can provide assistance with the listing, tenant screening, applicant selection and leasing process. They also are a valuable asset once the vacancy has been filled, taking care of rent collection, ongoing maintenance, and even financial reporting.
In the event that tenant issues arise, a property manager can mitigate conflicts or handle eviction processes. While rare, these issues do sometimes happen, so it’s important to have a secure plan in place. However, the best property management companies in Ottawa take tenant screening seriously and take a proactive approach to preventing issues before they arise.
Having an experienced professional on your team to manage your long-term rental property can reduce the stress of the changeover and keep things running smoothly, especially in new situations that you may not be as familiar with.
Tenant Screening for Long-term Rentals
The tenant screening process for long-term rental properties is much more thorough than for short-term rental properties. When considering a tenant to occupy your property for a one-year lease, it’s extremely important to do your due diligence. Properly screening your tenants will save you from potential issues down the road.
A thorough tenant screening process will include verification of employment, income, and references, as well as conducting background checks and credit evaluations. You’ll also have to ensure that you are adhering to fair housing regulations during the screening process.
Rental Pricing and Lease Agreements
When listing your property, carefully consider your listing price. Your price will determine whether your property garners any interest and the potential tenants that you attract. Market research will help you determine what comparable properties are being listed for, as well as important factors like local demand and vacancy rates.
Once you’ve set a competitive rental price and attracted qualified tenants, next up is the leasing process. In Ontario, you need to use the Residential Tenancy Agreement (Standard Form of Lease). When working with a property management company, you’ll have access to a leasing agent who can handle the leasing process and ensure you are compliant while providing great tenant communication at every step of the way.
Property Maintenance and Repairs
With a long-term rental property, it’s important to have a plan in place for proactive maintenance, maintenance requests and repairs. Be proactive with your property maintenance to help prevent larger issues later on. Schedule regular property inspections to stay on top of any needed repairs or replacements.
It’s also important to provide a timely response to any maintenance requests from your tenants. Ensuring they have a comfortable living space that is in good repair helps build a positive relationship with them, and ensures that you comply with long-term rental regulations.
Ready to Make the Transition from STR to LTR?
Should you switch from Airbnb to long-term rentals? Transitioning from short-term to long-term residential requires an understanding of rental regulations, listing marketing, tenant screening, and of course, a plan for long-term success.
By partnering with a reliable property management company, you can set yourself up for a positive experience as a long-term rental property owner, and years of success to come. DORE has over 20 years of experience in the business to help you make the transition seamless. Get a quote for our Ottawa property management services here.