The short-term rental industry is booming in Canada, and Toronto is one of its most thriving markets. With more than 19,500 active rentals, the market is expanding at a rate of 80% per year. But is it still a good investment opportunity for launching an enterprise? The short answer would be yes, as there are multiple important advantages to entering this particular market.
Advantages of Launching an Airbnb in Toronto
The main benefits of starting a short-term rental enterprise in Toronto are all concentrated around the developed infrastructure of the city. First of all, it relates to the development of the city itself, as it is a massive hub for internal and external tourism that millions of people visit throughout the year. Unlike most other parts of Canada, Toronto does not have such a strong seasonal effect, even though the fluctuations in demand are still there.
With its almost twenty thousand Airbnb listings, Toronto has one of the most stable hospitality markets in the world. The rate fluctuations are minimal here, and the Occupation Rates are stable from year to year. The rental market has been significantly damaged by the pandemic, but it is now actively recovering, giving investors a great opportunity to jump in
Another important aspect of the developed infrastructure of Toronto is the availability of professional management services. Unlike smaller towns or cities with smaller rental markets, Toronto offers high-quality management services from companies like https://hearthomes.ca/airbnb-management-toronto/. This enables the investors to ensure their business has a great start and grants them an opportunity to turn it into a source of passive income, while the management company is handling all the chores.
It is vital to keep in mind that the competition in Toronto is fairly intense. Other Airbnbs will be operating next door no matter which part of the city is selected for business. Even though it might repel some investors, those who are sure they can provide a high-quality service from day one will be able to thrive in this market. After all, 19,500 rentals have already proven their sustainability, and the steady market growth shows there is room for more.
Best Neighborhoods in Toronto for Launching an Airbnb
Even though the competition is fairly intense in every part of the city, some areas are more beneficial for launching an Airbnb right now. Each neighborhood has its own set of advantages and drawbacks, so it is important to consider them individually.
The downtown area of Toronto is undoubtedly the most demanded part of the city. Both foreign tourists and local visitors tend to choose this neighborhood for their travel because it has a lot to offer to all of them. It is both easy to reach any other area of Toronto from here, and all the most popular activities and venues are concentrated around the downtown area.
The competition and the real estate prices here are much more difficult to overcome than in some other parts of Toronto, but the rewards are worth it for most investors. Aside from high levels of demand, the downtown area also offers a seasonal effect that is much milder than in other neighborhoods of the city.
East End consists of multiple neighborhoods located near the downtown area of Toronto. This part of the city shares some benefits with the previous neighborhood on this list. Since it is close to the downtown area, most other destinations within Toronto are comparatively close to the East End as well.
The standout feature of these neighborhoods is their peacefulness. While downtown is full of the hustle and bustle of the big city, East End offers its residents lakes, parks, and other recreational areas. The visitors enjoy the unique combination of easy access to all of the modern infrastructure of the city and the opportunity to enjoy nature at one place.
The real estate prices in the East End are lower than in the downtown area of Toronto, but the demand is also not as high. The good news for investors who decide to launch an Airbnb here is that the competition in the East End is milder than in many other parts of the city.
The last neighborhood on the list is called Cabbagetown. In contrast to the two previous options, this location appeals to those who visit Toronto to admire its culture and learn more about its history. Cabbagetown is a historic neighborhood in the southern part of the city, and it offers all the attractions a tourist would expect.
Starting with a variety of museums and galleries and ending with beautiful parks and historic buildings, Cabbagetown is a great place to get to know Toronto better. Of course, there is also the Old Toronto neighborhood that achieves the same goal, but it is a significantly less lucrative investment opportunity. The competition there is fairly intense, and the real estate prices are over the roof.
The best point about Cabbagetown is that it is actually located fairly close to Old Toronto, enabling its visitors to quickly reach all the most popular museums of the city. The competition is also significantly milder here, as the neighborhood is not as densely packed with other rentals as the downtown area.
Summing up, Toronto is a great destination for an Airbnb investment. The market here is developed and very stable, and the business owners may be sure they will have a steady flow of guests. At the same time, it is important to keep in mind the competition and put all effort possible into improving the quality of service from day one. Toronto has amazing opportunities for investors who are willing to research the market and choose the correct locations for their rentals.