Have you been wondering how to make money with Airbnb in Canada? Do you want to build a passive income business that makes money while you travel?
From renting out a spare room in your house to purchasing an investment property, offering alternative stays (such as glamping or houseboats), or even providing a unique Airbnb experience, there are several ways to earn with the Airbnb platform.
Whether you already own property or you’re starting out with limited resources, I’ll outline the best ways to start generating Airbnb income!
Is It Easy To Become An Airbnb Host?
Airbnb is arguably one of the most revolutionary (and controversial) apps of our time. While it has helped many small business owners create passive income, some argue that the prevalence of Airbnb rental properties has created inflated housing prices.
The platform is designed to connect local hosts with potential guests who are looking for a place to stay. Guests can choose between a wide variety of stays, depending on their budget and what type of stay they’re looking for, including:
- A private room in a house or apartment
- Private homes and condos
- Mountain cabins
- Mansions
- Campsites
- Tiny homes and shipping container homes
As long as your listing complies with local laws and Airbnb’s policies, it’s fairly easy to get started as an Airbnb host.
Perhaps the simplest way to get started is to offer a paid nightly parking spot for travelling RVs and van-lifers. Even if you don’t own property and all you have to offer is expert knowledge of your city, you can still make money as a tour guide through Airbnb experiences.
Airbnb hosting can be fun and profitable, but it isn’t without its challenges. These could include:
- Damage to your property or theft of personal items
- Cleaning after guests (or hiring cleaners)
- Unexpected problems with utilities (power outages, leaking water pipes, poor internet, etc.)
- Maintaining appliances (A/C units, furnaces, washing machines, etc.)
- Unhappy neighbours
Failing to deal with these problems in a timely manner could result in poor reviews and refund requests, which could hurt your listing and your long-term income.
There may also be slow periods when you’ll go weeks without booking guests. During these periods, you could end up paying for the mortgage and utilities out of pocket.
I’m not saying any of this to scare you. However, starting an Airbnb business isn’t always passive. Until you get to the point where you can hire a dedicated property manager, you’ll need to be actively involved in daily business operations.
8 Ways To Make Money With An Airbnb Business
Are you ready to join the online marketplace, become a host, and start your Airbnb business? These are the best ways to make money and start earning rental income.
I’ll also mention the barrier to entry, as this could be an important deciding factor.
Some methods have a higher barrier to entry (i.e., purchasing an investment property), while others have a lower barrier to entry (i.e., renting out a room in your home).
1. Purchase Or Build A Dedicated Airbnb Rental Property
- Barrier To Entry: High
- How To Start: Purchase an existing home, condo, or land, obtain licences, list on Airbnb
If you’re looking to create a long-term, sustainable business model, you may consider purchasing a dedicated short-term rental property. There are several different ways you could go about this:
- Buy a single-family home to rent out (complete home rental)
- Buy a single-family home and rent out individual rooms (shared dwelling)
- Purchase a multi-family unit and rent out individual units
- Purchase property and build a rental space on it
Owning property gives you the most control over your listing, as you don’t have to worry about renewing a lease on a rented space or complying with a landlord’s requests. However, owning property also comes with some additional expenses, such as property taxes, maintenance, and homeowners insurance.
If you’re purchasing a home in a neighbourhood, you’ll also need to ensure that the local homeowners association doesn’t have any regulations against short-term rentals.
2. Rent Out A Room In Your Home
- Barrier To Entry: Very low
- How To Start: Set up a room, list on Airbnb, provide good service
If you’re not ready to become a rental property owner and don’t mind strangers coming in and out of your home, this can be a great way to help reduce (or even eliminate) your cost of living. All you need to do is set up a dedicated room where your guests can stay. Some necessities you’ll need to provide guests include:
- A safe, easy way for guests to enter, exit, and lock the house
- A bed with fresh linens and a blanket
- A lamp or lighting fixture
- A clean towel and cloth for bathing
Generally speaking, you’ll also need to provide access to a bathroom, shower, and kitchen space. To ensure your guests care for your space properly, you can create a set of house rules.
3. Offer An Airbnb Experience (No Property Needed)
- Barrier To Entry: Very low
- How To Start: Create an Airbnb account, offer your experience on the app, book customers.
In addition to short-term rentals, Airbnb offers unique experiences for guests to book. Airbnb Experiences are typically unique and may involve local activities, such as:
- Tour of the city or town
- Local bar crawl
- Art gallery walk
- Creative/crafting experience (pottery, painting, etc.)
- Spa experience
- Bicycle tour
The great thing about this Airbnb business model is that you don’t need to own a rental property or share your space with guests. Instead, you’ll be meeting travellers and providing them with a unique, unforgettable experience. It’s a great way to get paid for something that you already love doing.
The only downside is that you’ll have to compete with other hosts in your city who are also offering similar experiences. There can also be a lengthy application and approval process for your Airbnb Experience, as Airbnb reviews each listing. If a city is saturated with individuals offering experiences, Airbnb may temporarily halt new listings altogether.
4. Rent Out Your Home While You Travel
- Barrier To Entry: Low
- How To Start: Hire a property manager, list your home on Airbnb, collect income while you travel
One of the downsides of travelling is that you still need to pay your rent, mortgage, and/or utilities while you’re gone. This can become quite expensive, especially if you’re paying for additional living expenses while travelling abroad.
If you’re thinking about travelling for an extended period of time, consider renting your home or condo out on Airbnb.
Of course, you won’t be there to manage the listing, which means you’ll need to hire a dedicated property manager. Thankfully, Airbnb property management companies are fairly popular, especially in larger cities. You could also consider hiring a friend or family member you trust.
Property managers typically take a percentage of your earnings and are responsible for managing:
- Guest communication
- Guest check-in/check-out
- Cleaning (or hiring cleaners) between guests
- Property maintenance and repairs
Essentially, they’ll fill your shoes while you’re off travelling and enjoying yourself. Although you’ll be paying for their services, at least you won’t be paying out of pocket for a space you’re not living in. I suggest locking all of your valuables and personal items away in a storage unit or dedicated attic/basement space.
5. Rent Out A Rented Property (Airbnb Arbitrage)
- Barrier To Entry: Low
- How To Start: Rent a property, speak with your landlord, re-list the property on Airbnb, collect profits
Arbitrage essentially entails acting as a middleman. For example, you may rent a home or condo for $2,000 per month and then list the same space on Airbnb for $200 per night. If you’re able to rent the space out for 21 out of 30 nights a month, your gross income would be $4,200, which is double your monthly rent.
On paper, it’s a very simple business model. However, there are a few things you’ll need to account for.
First and foremost, most landlord rental agreements prohibit subleasing a rented property. If your landlord discovers their property listed on Airbnb, they could evict you and even pursue legal damages. This means you’ll need to be crystal clear with your landlord before you rent the property.
The good news is that some landlords are open to this as long as they get a share of the profits. Essentially, you’re handling the hard work of hosting/marketing the listing, and they get to sit back and earn additional rent money.
It all comes down to your ability to negotiate with a landlord. For example, if you see a property that’s being rented out for $2,000 per month, you may approach the landlord, explain the business model to them, and offer to pay them an additional $600 per month if they allow you to list it on Airbnb.
I actually met a guy in Thailand from Canada who was using this exact business model. In my mind though, he was violating the terms of his lease, which was a big risk for him. If you do this strategy, try to make sure it’s legit.
Note – while Airbnb arbitrage is technically legal, some municipalities prohibit this practice and only allow property owners to create short-term rental listings.
6. Set Up A Glamping Airbnb
- Barrier To Entry: Low
- How To Start: Buy a glamping tent, create an off-grid camping setup, and list it on Airbnb
Glamping has become incredibly popular, and 60% of Millenial and Gen Z leisure travellers in North America have booked at least one glamping stay in the past two years. Unlike traditional camping, glamping offers a more “glamorous” experience that typically entails:
- Large, spacious tent
- Outdoor firepit/cooking space
- Full-size bed and clean linens in the tent
- Gas-powered heating unit to keep guests warm
- Solar or battery-powered lights
You can purchase a large canvas tent for around $1,000, which can then be set up in a flat space. The neat thing about this business model is that you can create a glamping listing on an off-grid space without dedicated utilities.
You can set it up on your own property or pay a small amount to rent an undeveloped outdoor space on somebody else’s property.
7. Offer An Alternative Dwelling Space (Tiny Homes, Domes, And More)
- Barrier To Entry: Moderate
- How To Start: Build/deliver the dwelling space to a property, list on Airbnb
You don’t always have to buy a home or negotiate with landlords to become an Airbnb host. If you own land or can rent land from another property owner, you can offer an alternative dwelling space, such as:
- Tiny home
- Container home
- Geodesic dome
- RV/camper
- Treehouse
Today, you can find easy-to-assemble kits to build dome-style buildings or have a tiny home delivered on a trailer to your property.
I’ve even seen some people list their sailboats on Airbnb! There are lots of people who would love to spend the night on your boat while it’s docked at the marina just to fall asleep to the sound of the waves at night.
Often, these spaces are highly sought after, as they’re more about the experience than the amenities.
Many people who live in busy cities or have high-end condos are eager to experience a unique minimalist dwelling space far away from the hustle and bustle of the city. Some alternative dwelling units can be off-grid, while others offer power, running water, and even satellite internet. The more creative you can get, the more you can charge per night.
8. Rent Out A Parking Space For Vans And RVs
- Barrier To Entry: Very low
- How To Start: Set up a dedicated parking space on your property, list it on Airbnb
If you’re looking for the simplest, most straightforward way to start earning money with the extra space in your yard, you can rent out a parking spot for travelling RVs and vans. RV campgrounds can often be expensive, and travellers are often looking for a safe, affordable alternative.
You could offer a bare-bones parking site for a low nightly rate or may choose to offer an electrical hookup, water hose, and even internet access for an additional fee.
If you really want to increase your value proposition, you could even set up a nice outdoor camping area complete with a firepit, chairs, and lighting, so travellers can get out, stretch their legs, and enjoy a night camping out with their family and friends.
Do You Need A Business License For An Airbnb Listing?
In April 2023, the Investigative Journalism Foundation reported that there were over 33,751 Airbnb listings spread across the nine largest cities in Canada. Only about half of these were licensed, though.
As Airbnb hosting has become increasingly popular in the country, short-term rentals have become a hot topic in the news. Many municipalities require Airbnb hosts to register their short-term rentals before they’re allowed to collect business income.
However, many listings have failed to comply with these regulations, which has led to increased regulatory scrutiny on short-term listings. As a result, starting an Airbnb business today may require more paperwork and permits than it did ten years ago.
As far as Airbnb is concerned, hosts aren’t required to have a business license to post a listing. That being said, your local city or province may require you to register your listing and obtain a business license, especially if it’s a dedicated rental property (as opposed to renting out a spare bedroom in your home).
If you’re posting a listing in a city that requires licenses and permits, Airbnb may ask you to provide this paperwork before your listing is posted.
Tips For Airbnb Hosts To Save And Earn More
Want to attract more guests and earn more from your listing? Here are a few quick-fire tips to help you make the most from your Airbnb listing.
- Take High-Quality Photos For Your Listing: Stage the listing nicely and at least 10 high-quality photos of the listing to give potential guests a feel for the spot before they book it.
- Create A Niche Stay: Creating a theme for your listing (i.e., boho-style, retro, rustic, modern design, etc.) can help you book niche customers.
- Offer Helpful Guides: Knowledgeable hosts who share local eating spots, fun activities, and more often get better reviews.
- Ask For Reviews From Customers: After guests leave, send them a friendly message asking them to leave a review. The more reviews you have, the more popular your listing will be.
FAQs About Airbnb Canada
Last but not least, here are a few answers to some of the most commonly asked questions about operating an Airbnb rental in Canada.
Can Airbnb Hosts Accept Cash Payments?
No, Airbnb hosts may only accept direct deposit payments from the Airbnb platform.
What Are The Airbnb Taxes?
Whenever guests book a rental, they must pay any applicable GST/HST sales tax. As a host, you’ll also need to pay business and income taxes on your earnings from the listing.
How Many Airbnb Listings Can I Have?
You can have as many Airbnb listings as you want. Just be sure to expand steadily at a rate that you can sustain.
What Type Of Insurance Do Airbnb Hosts Need?
Airbnb hosts should have some form of liability insurance to protect themselves and their business against accidental damage or injury that guests sustain on their property. If you’re listing a home that you own, you’ll also need to factor homeowners insurance into your management expenses as well.
Becoming An Airbnb Host – Is Airbnb Profitable?
Operating an Airbnb can be a profitable business, especially if you’re close to a big city or popular tourist destination. Just keep in mind that your listing probably won’t be booked 100% of the time, and you’ll need to put away extra savings to account for the slow months and property maintenence.
One of the easiest ways to start is by renting out a spare room in your home. This will give you a feel for what it’s like to be a host and can help you reduce your living expenses.
If you plan on becoming an Airbnb host, you’ll want to invest in a quality home security system to protect yourself and your guests and monitor who’s coming in and out of your listing. Keep on reading to check out my list of the best (affordable) home security systems!
