SHORT-TERM RENTALS
While the downtown core of Montreal has long been known as a renters’ paradise, the short-term rental market has experienced a surge in recent years. From individuals renting out income properties, to companies purchasing blocks of units for rent, several real-estate brokers have noticed that demand for short-term leases is on the upswing.
Short-term furnished rentals come in all shapes and sizes. They range from 300-square-foot micro-studios to multi-bedroom penthouses. Airbnb has become a big player in the short-term rental market in Montreal. In fact, many furnished rentals are listed on the market and on Airbnb simultaneously.
“This allows for landlords and owners to rent out their units nightly, weekly or yearly and attract a larger demographic,” said Saguy Elbaz, real-estate broker with Sotheby’s International Realty Québec. “Airbnb has changed the market for short-term rentals in many ways; the site allows people to generate some income while they are away on vacation in order to cover their fees and expenses.”
Indeed, Airbnb makes it extremely easy for people to sublease their units short-term, especially during special events.
“Grand Prix this year was a perfect example,” said Tristan Pungartnik, real-estate Broker at Royal LePage Heritage. “Many people noticed they could get good money for their units over the hyped-up weekend, so they crash at a friend’s place or leave town for the weekend and sublease their units.”
Downtown, Old Montreal, the Plateau, Quartier des Spectacles, and the financial district are a few of the neighbourhoods where the market for short-term rental units is booming. There’s also a growing demand for big furnished houses in Westmount, Elbaz said.
“Airbnb units and short-term rentals can be a very lucrative business. Basic 3½ apartments can be rented out for $175 to $500 a night, depending on the season.”
Some larger condos and houses are fetching even $7,000 to $15,000 per month, he added.
Landlords, especially in the downtown core, are adjusting to this new demand.
“Instead of renting out a vacant unit for $1,200 per month, they can now fetch $2,000 per month with furniture and basic services,” Elbaz said. “It’s becoming a very appealing business — so appealing that it has been affecting my sales in a very positive way. I sold three units in a single month to investors who wanted to rent short-term.”
Pungartnik also noted that the popularity of short-term leasing is driving people to buy units with the intention of furnishing them and renting them out.
“They are essentially trying to create mini-hotels spread over various units in various buildings,” Pungartnik said. “In the past, people were mostly looking to buy unfurnished units that they could rent out for 12 months or more, but now the furnished short-term approach is very common and can be more profitable.”
This corner of the market is appealing to a wide range of renters — from vacationers who need more space than a typical hotel room allows for, to newcomers to the city who want to explore different neighbourhoods before deciding where to purchase property. These rental units are also of interest to companies hosting employees or consultants from out of town, international students, and movie productions.
The impact on the hotel industry, however, has not been favourable. In fact, hotels are the biggest victims of the advent of Airbnb.
“People who rent their units out short-term are supposed to be registering their units with the Corporation de l’industrie touristique du Québec and paying fees/taxes, but no one is really cracking down on them,” Pungartnik said. “Essentially, people are stealing business from the hotels, who for now have no recourse.”
While some landlords are capitalizing on this trend by furnishing their vacant units and placing them on the market, short-term rentals are creating a problem for others, as most tenants are not aware of the laws that come with subleasing their unit.
“The tenant is supposed to advise the landlord in writing of their intention to sublease and the landlord has 15 days to approve or reject the request,” Pungartnik said. “Most tenants do not respect this law and bypass the landlords altogether, which means landlords often have no idea who is occupying their units.”
That being said, it doesn’t seem as though these issues will dull the momentum of the Airnbn/shortterm rental market in Montreal any time soon.
“This is just the beginning,” Elbaz said. “Short-terms rentals will have a very strong impact on property values and the rental market as a whole in the years to come.”