• Duane Narine

The MOST IMPORTANT First Steps Before Starting An Airbnb Business

Updated: Feb 4

You have determined that this is the path you want to explore, the vacation rental market. Maybe you’ve decided to enter this market because you are attracted to the returns it will yield you as an investor, owner and Airbnb host. Maybe you want to provide a service and product that will allow you to meet thousands of people and give them an unforgettable accommodation experience. Whatever your desire for entering this market may be, consider your local Airbnb laws and regulations first and foremost.

Do your research, make the necessary calls and e-mails to find out whether or not you are permitted to operate a short term rental property. In cities all over the world, renting your property as a short term rental (30 days or less) is either fully allowed, prohibited or regulated. This is the most important first step otherwise you could be wasting time, money and effort in this venture.

If it is a regulated market then find out what those regulations for Airbnb are and fully comply with them.

Even though some cities around the world prohibit the practice of renting your property on a short term basis, some individuals ignore those laws and still go for it. All literature within this website will not suggest this. We prefer to give you direction on running a business that is completely legitimate.

Should you choose to work against your local laws for Short Term Rentals, you could face fines which would eventually and ultimately put you out of business. Once your city flags you as an illegal operator of Short Term Rentals they will continue to ensure that you are not running this type of activity in your property by continuously monitoring sites such as Airbnb, Expedia,, HomeAway/VRBO, etc. Visiting your property to investigate is another example of the lengths that city officials will go to ensure you are not operating a Short Term Rental. Let’s face it, fines are a form of revenue for the City. Our utmost honest advice is to highly suggest that you do not go down this path.

What Regulations Do Some Cities Employ?

· Prior to operating a short term rental, you as the operator must possess a “short term rental” business license.

· Operators of Short Term Rental property must register with their city.

· The Property must be considered a Primary Residence

· The Primary Residence can only be rented out on a short term basis for no more than 180 calendar nights.

· Paying a Municipal Accommodation Tax

Why Do Some Cities Employ Airbnb Regulations?

The above regulations across certain cities have been put in place to alleviate the impact that short-term rentals have on long term rental stock. I’m sure quite possibly this is also in play due to the impact that Short Term Rental properties have on the hotel industry. Think of the Uber effect and how that sharing platform disrupted the traditional Taxi service.

Condo Rules

Just like houses, condos are a community in itself and thus rules must be adhered to. If the building you intend to operate in allows short term rentals, it is advised to read through the condo declaration and pull out all of the rules that would be applicable for your guests to follow. These rules should be documented in your rental agreement as well as house rules that will be delivered to your guests in their confirmation of reservations e-mail. You can also post these rules in the property.

Heavy emphasis of these rules will help to ensure that you don’t receive complaints from your neighbours and shows that you as a host respect the building and community within.

Relationship building is key, even with your neighbours. You never know when you might need a favour from one of them with your rental property or they may even need a favour from you. The less complaints received from a Short Term Rental the less likely the topic of transient rentals will come up for discussion in Annual General Meetings thus making it favourable to keep your operation going.

You’ve determined that you are free and clear in your city to run a STR property. Now you need to make sure you are able to do that within the Condo should you choose to run this type of activity within a Condo Building.

The simple and most effective way of doing this is by calling or visiting the Property Management Office for the building you are curious about. Ask them if they allow Short Term Rentals. If the answer is a no, move on. Here in Toronto, I am well aware of every building that allows STR. That came by way of spending weeks calling each building in the downtown Toronto area.

If you currently own a property then pull out your purchase agreement. This is typically a very lengthy document and you will have to go through it thoroughly to find one specific thing. You will be looking for a clause that indicates that “transient rentals are permitted” or “hotelling of your property is permitted”. This is the lengthy way of finding out whether or not Short Term Rentals are allowed in the building.

Rules Can Change

Be aware that Condos are able to change the rules in the building. While they may allow it today does not necessarily mean they will allow it forever. However, if they’ve allowed it from inception then it typically is very difficult for them to change this rule and it costs them a ton of money to do so. Residents must vote and the vote has to be 80% or more. In this day and age where STR properties are a big thing, a building that allows STR will have quite a number of listings likely outweighing or even balancing the number of Residents versus hosts. If an 80% vote in most cases is not reached then the proposal to amend a law will not pass. Not to mention that most residents don’t even show up to these meetings. So while rules can change, it is rather difficult to change, very time consuming and costly to the corporation.


You will want to speak with city officials regarding rules and regulations or limitations in operating a short term rental property. If you intend to rent a house then proper zoning or permits may be a requirement in order to do so. Short term rental zoning provisions typically define short term as less than 30 days. This can also be referred to as transient rentals, or short term transient rentals. Sometimes a special use permit will be required in order to operate. The rules and regulations will differ from city to city so your absolute best course of action is to contact city officials, spill out your intentions with your property and don’t leave anything under the carpet. The last thing you want to have happen is that you’re stopped in your tracks down the road. Rules are ever so changing so just because it may be allowed at this point in time, that doesn’t mean that things can’t change. The sharing economy is a large marketplace and with more and more people participating in it, rules are bound to change over time.

In Toronto, a proposal has come forth to regulate the vacation rental market. The tendency when regulations come into effect for the first time is to begin with minimal regulations and then add requirements or further changes on the basis of problems that arise. Always stay in the loop with what your city has plans to do so you are well informed and can change directions if required.

So, before you venture down this highly lucrative path, please ensure you are either complying with the rules if you are in a regulated market or sadly, not participating in this activity should your local Airbnb laws/renting rules and Condo Corporation deem that you are prohibited from doing so.