Airbnb by the numbers: How much can you make?
As I detailed in a previous post I have used multiple properties that I have purchased to help generate additional cash flow using the Airbnb platform. Being an entrepreneur and starting businesses can be a difficult and trying time. By using this strategy it can help to alleviate some of the financial pressure regardless of what you might be setting your sights on.
How much can you really make by hosting guests arriving in Toronto that book through Airbnb?
Lets break down the numbers on my most booked condo in Toronto:
Size: 1 bedroom condo
Location: Bloor and Sherbourne. Minutes from the TTC subway and Yorkville shopping
Mortgage (principal and interest): $1,050/month
Property taxes: $185/month
Maintenance fees, internet, & utilities: $370
Total carrying costs: $1,605/month
Strategy: Since my condo did not allow short term rentals I had to switch my bookings to a minimum of 1 month at a time. At first I was concerned that this would severely limit the amount of bookings, but surprisingly it didn’t have much of a negative effect. And the great thing was I was no longer having to book cleanings in between each short visit. The downside was that I could not charge the $125/night I was getting any longer.
Average Monthly Rate: $2,350
Vacancy in 2015 – 10%
Adjusted monthly rate: $2,115
Total positive cash flow per month: $2,350 – $1,605 = $510
What if my monthly expenses are too high?
That’s a great question, and often many people get discouraged at the idea of generating some passive income using this method because their monthly expenses are too high and the math doesn’t work out. My strong suggestion is to contact me so I can review your current real estate portfolio and current mortgage to see if we can make the strategy work. You’ll never know if you don’t ask and it’s as simple as filling out my no obligation application and letting me look at the numbers for you.
Looking for a property to rent out?
I’m no real estate agent, but I did sleep at a Holiday Inn. <– get it??! haha.
I’ve lived all over Toronto- from Queen West (go Trinity Bellwoods!), Yonge and Eglinton (yay LRT!), Bloor West (ahh tranquility), Etobicoke (Lakeshore-Parklawn), King West (is there an off button here?) and that’s just in the past 6 years! I might not be a real estate agent, but I can definitely run through some strategies and scenarios with you after we figure out your budget to help maximize your rental property. Having some unbiased third party advice from someone that has utilized this strategy is never a bad idea!
Oh and check out this blog post if you are curious as to how I (and other brokers) get paid.
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