Short-term rental: Investment for growth!

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Short-term rentals have been gaining popularity among investors over the past 10 years. In addition, the CEO of Airbnb himself has argued that it would take several million more accommodations to rent to meet the demand for years to come.


What is a short-term rental?


Short-term rental consists of renting your accommodation by the day or week rather than by the month.

Short-term rental is when accommodation is rented for a period of 31 days or less. Offering tourists to rent accommodation for a period of 31 days is a practice governed by the Act, which requires a permit from the CITQ.

In addition, it is interesting to know that short-term rental is possible with both a main residence and a secondary residence.


What are the short-term rental options?


You may have had several ideas for short-term rental options.

When looking at short-term rental, several options are possible:


  • Rent your main residence whenever you are away;
  • Rent a condominium room in your main residence;
  • Rent your secondary residence, for the year or a few weeks per year only;
  • Rent a condo;
  • Rent a trailer
  • A “Glamping” site
  • An Unusual dwelling (a tree house for example)
  • Do house hacking


Permits and Requirements


As mentioned above, people renting a residence covered by the Act respecting tourist accommodation establishments must ensure that they hold the certificate required by the Quebec Tourism Industry Corporation (CITIQ).

This certificate is in fact a written notice as well as an establishment number provided by the CITQ and will be given to you following an inspection of your property.

The establishment number must be indicated in any announcement or publicity used to promote the rental of such an immovable, failing which, fines ranging from $2,500 to $25,000 in the case of a natural person and from $5,000 to $50,000 in other cases may be imposed on you.

Residences bidding on any website such as Airbnb, Kijiji,,, WeChalet, or Marketplace with a rate per night or per week without a permit is an offense, even if in fact the accommodation is not rented.


Municipal regulations


Before submitting an application for a classification certificate for a property, checks must also be made with the municipality to ensure that short-term rentals are authorized there.


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Some of the strictest municipalities require the landlord to comply with the regulations specific to short-term rentals in the sector in terms of nuisance, safety, and sanitation.

In the event that the regulations are not respected, his classification certificate could be refused, suspended or canceled accordingly.

To find all the information concerning the short-term rental of a municipality or the coordinates of the person responsible to answer your questions.


Taxes and Insurance


Some municipalities may increase municipal taxes on your building if you are renting for a short term. So, ask the municipality to see if this applies to the residence you want to rent to avoid any unpleasant surprises.

You will also have to think about collecting the accommodation tax on all rentals and potentially think about collecting the GST and QST if you generate more than $30,000 per year in income. If you collect GST and QST on rentals, it could even force you to collect GST and QST on the sale of your building.
If you are seriously planning to get into a short-term rental, I strongly suggest that you call an accountant or a tax specialist who can better guide you on this subject.

In Quebec, you will also be required to take out civil liability insurance of at least $2,000,000 to legally rent a short-term rental. Sometimes it is not as simple as calling your insurer to increase your premium to 2 million, because many insurers do not like to insure a property dedicated to short-term rental. But, in 2022, several insurers have adapted to the new reality and now offer insurance policies intended for this purpose.


Advantages of short-term rental


  • Higher earning potential: Tourists are willing to pay more per night or per week for short-term rentals, as the service offered is more like overnight accommodation than standard long-term rentals. You might be surprised to learn that renting a property for just a few weeks per year would be enough to cover all the costs for the year, and renting the whole year could turn out to be a real goldmine for you.


  • Accessibility of your property: When you own a building with a value of several hundred thousand dollars, it is normal to want to know the inventory of fixtures from time to time. By renting short-term rental accommodation, it is easy to check each landlord and make changes or work as you see fit. Also, if you rent a chalet, for example, it is common for owners to set aside a few weeks a year to enjoy their residence with family or friends.


  • Price Control and Flexibility: Short-term rental offers greater flexibility in terms of price management. It is advantageous to be able to adjust the cost per night of your accommodation according to seasonality in order to optimize your income as much as possible during high season and low season.


Disadvantages of short-term rental


  • Seasonality: Unlike traditional rental with a one-year lease, monthly revenues are variable and difficult to predict. When a tenant signs a one-year lease at $700/month, for example, and the necessary precautions such as a credit check have been taken when selecting your tenant, you can expect to receive $700 each month. On the other hand, when you rent short-term rental accommodation, your monthly income will always vary and depend on the time of year, the location of your residence, and its attractions.


  • Management: In short-term rentals, you can receive hundreds of tenants in a year, so coordinating stays and cleaning between each client, optimizing profitability, and managing the maintenance of the property are more complex things than in multi-unit rentals standard. Fortunately, there are management tools to automate much of the management of a short-term rental property. It is also possible to do business with companies specializing in the management of short-term rental properties to delegate the task 100%. Despite the challenges, it’s worth the effort to experience superior returns and generate big cash flow with your properties.


  • Financing: Finally, the majority of banks consider this type of investment riskier than traditional buildings for rent with a one-year lease. As a result, they reduce their risk by requiring a larger down payment, ranging from 35% to 50% compared to 20% in a standard rental building.

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