Why You Should Invest in a Short-Term Rental in Victoria
Posted by Niels Madsen on
In the wake of Covid-19 many investors were left wondering about the future of the short-term rental market, with expected downturns as people isolated at home. However, that prognosis is slowly shifting.
As domestic tourism is set to become even more popular, the short-term rental market is set to bounce back in a big way. With that in mind, here’s a guide to what you need to know about short-term rental investment in Victoria.
The Covid-19 Effect
The short-term rental market was of course hugely affected by the pandemic, with tourism and travel virtually at a standstill. However as BC shifts away from the peak of the crisis and things gradually begin to open up again, there are a number of reasons we believe the short-term rental market will once again prosper.
New Way of Travelling:
As stay at home orders are lifted, people will be experiencing an unprecedented urge to travel, to make the most of the world around them.
With a greater focus on personal hygiene and privacy, tourists may be drawn towards the security of a short-term rental in comparison with a hotel.
A new kind of staycation
Ordinarily the idea of working and holidaying simultaneously would seem counter-intuitive, but with more and more employees remote working, we could see people opting for 2-3 week stays they can build around a work from ‘home’ schedule using a short term rental property.
Know The Rules
In recent years the short term rental market in British Columbia has become more tightly regulated - something investors need to be keenly aware of before they make any decisions about their portfolio.
Within BC these rules can vary between cities and even within municipalities, but for the purpose of this post, we’re going to keep our sights firmly on Victoria.
Victoria rules include:
Short term rentals are only permissible in buildings that were previously used for that purpose prior to the new regulations being introduced.
Short term rentals must also be operated in compliance with the relevant strata regulations.
Anyone leasing a short term rental must have a short-term rental business license.
To sum up simply: investing in short term rentals will require extensive knowledge of the building history, local regulations, and may need a relationship with other owners in the strata or the building owner themselves. This is something that can only be found by working with a knowledgeable local real estate expert.
Get Your Money’s Worth
When it comes to property investment the bottom line is everything - and we don’t just mean profitability. An investor will also be looking for predictability, something that can be hard to find with short-term rentals. However, a well-equipped and prepared investor should be able to capitalize and get your money's worth.
To help here are our tips for finding a profitable short term rental property:
When it comes to pricing, don’t just ‘set it and forget it’. Yes, establishing the right opening price is crucial, but even more so is being flexible going forward, responding to seasonal changes and market fluctuations appropriately, and knowing when to charge more and when to entice with a bargain.
Find the right location - you’re going to need somewhere desirable, somewhere people will want to come and stay. That’s why investing in short term rental properties in Victoria is a safe bet. It's a beautiful city with a mild climate that is very attractive for Canadian travellers and is going to remain a popular spot for a long time.
Capitalize on the off-season - many short term rental property investors know how to make the most of those booming holiday months, but struggle during the off-season. This doesn’t have to be the case, by understanding your area and it’s more local, authentic appeal, and having a target audience in mind, you can make money even during those fallow periods.
Go after repeat business - short-term doesn’t have to be 'one and done'. By building a stable of repeat customers you can lower your marketing costs, and develop profitable relationships with trustworthy customers.
What Makes Victoria Special
If all this talk of regulation has you casting glances towards other areas - think again. Victoria is the ideal place for a smart investor to make the most of their short-term rental portfolio.
Rather than hurting your chances, the increased regulations will simply mean the market isn’t as crowded with competition as other areas, where it’s become something of a free-for-all. And what a market it is!
Victoria is one of the most popular, and remarkable tourist destinations in the beautiful Pacific Northwest, featuring an array of attractions, natural beauty, and superb restaurants. It's a beautiful corner of the world that can be visited year-round, and with Canadians hesitant (or restricted) to travel abroad, Victoria is the perfect place to come visit.
Once you have your location and your ideal property, you may be expecting the returns to come pouring in - however, you shouldn’t worry if they don’t. The short-term rental market is very much a long-term game, with patience being a must for any investor.
Bookings can take some time to come in, as your reputation on the various listing sites grows and you begin to market more effectively, so don’t be afraid to begin with lower prices than you’d expect, gradually building to your real market value.
When it comes to property investment there isn’t anything more valuable than the counsel of experts who know the local market like the back of their hand - and that’s what we’re offering here at Madsen Langlois. We’re always at hand to talk you through everything you could possibly need to know, before helping steer you towards a winning investment for your portfolio.