By using Airbnb instead of the more traditional rental route, owners of three-bedroom properties in Vancouver could save themselves about 10 years when it comes to paying off the price of their property, a new study says.
That said though, Vancouver still remains less profitable than other cities for Airbnb operators.
The study was done by British online real estate agency Nested.
“Vancouver has relatively high prices and low rental yields which is a natural pairing,” Nested CEO Matt Robinson told Daily Hive. “What sticks out most is that Airbnb is not as powerful a tool for landlords as in other countries.”
Nested’s study pegs the cost of a three-bedroom property in the city at $865,344, and the average monthly rental of said property at $2,540 a month.
It found that by going the more traditional rental route, it would take almost 28-and-a-half years to recoup the purchase price.
By comparison, the average monthly Airbnb rate totalled $4,037, meaning that it would take slightly longer than the 17-year mark to make it all back.”
The return rate ratio puts the city in 68th place when it comes to the gap between traditional rental revenues and Airbnb.
In Vancouver, Robinson added, “Airbnb yields are 50% more than long-term rents whereas in other major cities Airbnb yields are typically three to five times long-term rental yields.
Comparing the numbers
By comparison, a three-bedroom property valued at $94,343 in Durban, South Africa, rents for an average of $565 a month, but can yield as much as $5,301 via monthly Airbnb rental – good enough for top spot on the list.
“For 75 international cities, we researched thousands of properties sold in the last 12 months or currently on the market to find the average price of a three-bedroom property,” Nested said in a release. “For each market, we calculated exactly how long it would take you, in months, to recoup the property value based on average rental and Airbnb costs.”
The study also assumed properties would be rented at an 80% capacity.
Top 10 cities for Airbnb profit ratios
- Durban, South Africa
- Lagos, Nigeria
- Cairo, Egypt
- Reykjavik, Iceland
- Johannesburg, South Africa
- Santiago, Chile
- Athens, Greece
- Bangalore, India
- Dubai UAE
- Bucharest, Romania