• Duane Narine

3 Ways To Monetize With A Property On Airbnb

Updated: Jan 23

There are 3 proven ways to monetize well in this industry.

1. Owning Property

2. Subletting/Leasing Property

3. Managing Property

1. Owning Property

Owning property allows you to create income and keep 100% of the profits. Your first step in owning a short term rental is finding the best property that will do this for you.

If you are a Real Estate Agent then great, you have complete access to search listings and book yourself to see these properties. If you are not an agent then you will want to pair up with one.

Have your agent search for condos for you. I suggest condos first because most condos come with amenities such a swimming pool, fitness centre, lounge, and anything else that guests will be attracted to. Your guests will want to feel like they are getting what they would get in a hotel but with way more value. Look at buildings that have highly rated amenities.

The building you want to be in should be as close to as many major attractions as this will aid in higher conversion rates. Keep in mind that being in such sought out areas will more than likely come with a heavier price tag for the property. You don’t necessarily need to be smack in the middle of such sought out areas to produce high yields. This is where your SEASONED Real Estate Agent will play a game changing role for you. One of the properties I own is not in the centre of it all but not far off either and it still produces high returns as properties I have that are in the downtown core.

Keep in mind the rules and regulations regarding Condo Corporation Laws and the restrictions they have on Short Term Rentals. If the building you are interested in does not allow STR then move on to the next building on your list.

2. Subletting/Leasing Property

You don’t necessarily need to own property to absorb the returns in this marketplace. In the past we have employed this model to our advantage and it worked extremely well.

Subletting involves leasing a property that is already being leased to you. The Landlord is the lessor, the tenant is the lessee and the sublessee is renting from the lessee. To make it a simpler explanation, subletting is when a tenant decides to rent out either a room or whole property to a third party.

Before exercising this option, you will want to give full intentions to the Landlord so that they are fully aware of what you plan to do with their property. Subletting in some buildings are prohibited so ensure you do your due diligence first before exploring this path.

Your Landlord from a human perspective once given your proposal of subletting to rent out their property as a Short Term Rental may likely raise their brows a few notches. Our advice is to put together a compelling sales pitch.

Model A

Let’s say the Landlord wants to rent out the space for $1800 per month, you could come in and offer a higher monthly price that you are willing to pay maybe at $2000 - $2200 per month. The Landlord then gets their expected price per month as well as $200 - $400 extra in their pocket.

Model B

Another pitch could be paying $1800 per month with a percentage of revenue on top of that. This could work out to be higher than $200-$400 per month and we only advise this model if your Landlord is putting up resistance on Model A.

In both above models, you will also want to fill in the Landlord of how you run your operation to give him or her peace of mind. The articles throughout this site will help you with the remainder of your pitch including Rental Agreements, Security Deposits, Vacation Rental Insurance, Policies and Procedures, House Rules, etc.

When we were subletting properties in the past we were always able to secure Model A of a higher monthly rental.

Subletting for Short Term Rentals may seem risky as you are leasing a property for a minimum duration of one year which involves a financial monthly commitment. You might be thinking to yourself well what if I don’t see any bookings come through. In a strong Vacation Rental Driven area, this risk is very minimal. Subletting is a great start to building cash flow so that you can eventually end up buying your own property or properties.