The COVID-19 crisis has been taking its toll on the short-term rental market all over the world, travel restrictions have eliminated leisure and business travels created significant vacancies across all short-term rental platforms. Airbnb bookings dropped over 70% in the first months of the pandemic, [NTD: more stats about vacancies in the Toronto market from Ben M]. Market conditions lead many condo investors in Toronto to suffer from long vacancies and deep negative cash flow forcing many of them to sell distress.
So how can investors turn their short-term rental property around?
At Dash, we’ve assisted many landlords stabilizing their properties throughout COVID with over 95% occupancy rates across our $500M+ portfolio and 98%+ collection rates at times when vacancies and rent disputes are at a record high, so we’ve put together 3 easy steps that any of you landlords can take to stabilize:
1. Pivot & Go Long-Term – and stabilize your cash flow.
Follow the demand and pivot. That’s right, no travels but life goes on, young professionals and young families still need (and want) to live in Toronto and condos are still the most affordable solution for them. Finding great tenants these days is difficult but still possible with all the marketing websites, once you find a good tenant, be flexible on the pricing if necessary, in most cases, you’ll lose more money being vacant for another month than the discount you’ll be giving them over a year. Stop the bleeding and evaluate your options in 2022.
2. Give Up Furniture – Cater to your new clients and let them feel at home
With the change to long-term rentals, unfurnished apartments become more desirable in many cases. On top of people’s hygiene concerns, aesthetics, and comfortability preferences, it just makes more sense to provide tenants the freedom and responsibility of furnishing their new home to their liking. Find a good storage solution and stop worrying about fixing the damages of your designer’s pieces off your plate and reevaluate when COVID will be over.
3. Leave it For The Pro’s – Save your time, energy and maximize the market
Stop spending your time and energy looking for tenants, enforcing rent collection, or deal with damaged properties and renovations’ contractors and let a professional manager deal with all that headaches so you could go back to focus on your life. Most managers will cost anywhere between half a month to a full month’s rent over a year term, good managers return that investment many times over by leasing/collecting faster and fixing up the property faster and cheaper. Today more than ever go for quality versus pricing and make sure you pick an experienced manager with a good track record that will be able to handle the COVID challenges.