Edmonton is a Canadian city located in the Alberta province. It is considered one of the most beneficial places in the entire country for launching an Airbnb business in late 2023 and early 2024.
The rental market of Edmonton is growing steadily, and the infrastructure is well-developed. Local entrepreneurs can even benefit from the professional management services of companies like https://hearthomes.ca/airbnb-management-in-edmonton/. But before entering the market, it is vital for investors to discover the nuances of the legislation and the conditions of the real estate market in Edmonton.
Legislation of the Short-Term Rental Industry in Edmonton
The legislation for the short-term rental and hospitality industries in Edmonton is very similar to the rest of the country. The entrepreneurs who already own Airbnbs in different cities and provinces will already be familiar with the main laws regarding the business.
The three core points new investors should keep in mind are related to zoning laws, licensing, and taxation. The situation with zoning is rather straightforward, as the entrepreneurs will only need to ensure the location they are considering for a future Airbnb is approved for being rented out.
Licensing is also not as difficult and tricky as it may sound. The investors will just have to submit an official application to local authorities, and in case the property complies with zoning laws, it will most likely be approved. After paying the fee and obtaining the license, the owners will have to display the license number in all listings they post on Airbnb.
Last but not least, revenue from Airbnb is subject to taxation. The average annual revenue of an Airbnb in Edmonton is $27,500, and the hosts have to pay a 5% tax on all revenue their Airbnb generates. The process is also fairly straightforward, and Airbnb has tools that make filing the documents easy.
Airbnb Real Estate Market of Edmonton
The real estate market in Edmonton was significantly influenced by the emergence of Airbnbs in the city, and this effect is becoming stronger every year, as the short-term rental market continues to grow. Of course, the real estate price may vary dramatically depending on the selected property type.
Townhouses in Edmonton cost $267,000 on average, while the average price for a condo apartment is $182,000. Detached homes are expectedly the most expensive option with an average price of $493,000.
The price also depends on the area of the city, and the good news here is that the demand is not strongly affected by the location in Edmonton. While in major cities like Toronto, the most demanded areas are in the city center, the visitors of Edmonton are more willing to stay in different parts of the city. Edmonton is fairly small, so the investors can select a property with almost no regard to its exact location.
Challenges and Advantages of Launching an Airbnb in Edmonton
Just like any other city in Canada or any other country, Edmonton has its own unique market conditions. There are multiple major benefits of launching an Airbnb here, but the business also comes with some challenges that have to be taken into account by aspiring entrepreneurs. Understanding these factors is crucial for making an informed decision, so aspiring entrepreneurs should discover them in advance.
Benefits of Selecting Edmonton for an Airbnb Business
The main benefit of choosing Edmonton for an Airbnb launch is the sheer potential the city offers. The market has been growing steadily at a rate of at least 15% a year for the past three years, and it was one of the first markets in Canada to recover from the pandemic damages.
The revenues generated by local properties are quite impressive. On average, an Airbnb in Edmonton brings in $27,500 worth of revenue a year, and the number is growing steadily. The occupancy rates, even despite the constantly growing supply are becoming higher every year as well. Right now, the annual average occupancy rate of an Airbnb in the city is 59%. It is not as impressive as in some other Canadian cities, but the average daily rate of $127 allows local properties to stay viable.
Even though the competition is fairly intense in the city, it is evenly spread throughout its territory. As mentioned, many major cities have neighborhoods and areas where most visitors are looking to stay, and both the real estate prices and competition are usually severe there. In Edmonton, both competition and demand are more or less the same everywhere, which is always a benefit for the host.
Challenges of Managing an Airbnb in Edmonton
The main challenge associated with managing an Airbnb in Edmonton is, of course, the competition. There are 2,500 active listings in the city, and the entrepreneur will have to compete with most of them. Interestingly, almost 44% of hosts have already selected flexible cancellation policies for their Airbnbs. In most other cities, new entrepreneurs can gain a competitive advantage over strict policy listings, which are typically the most popular ones, and it is not the case in Edmonton.
The second major challenge every entrepreneur in Edmonton has to overcome is the seasonality of demand. It is not as strong as in some other Canadian cities, but most visitors still come to the city in summer, and the hosts have to adapt to it. It is both important to account for this effect while budgeting and updating the rates accordingly to optimize the performance of the freshly launched business.
Summing up, Edmonton offers aspiring Airbnb investors some great opportunities. At the same time, the challenges associated with conducting business here are not as tough as in some other Canadian cities, making it a viable option for many entrepreneurs. The market is growing steadily, and the successful performance of existing properties alongside with the constantly growing demand suggest there is still room for more Airbnbs in Edmonton.