As interest rates in Canada continue to rise, many Canadians are looking for ways to make the most of their money. One option that has gained popularity in recent years is short-term rentals. Here are a few reasons why this type of investment can make sense in today's market:
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Higher returns: Compared to traditional long-term rentals, short-term rentals can provide higher returns. This is because they are typically rented out at a higher rate per night, and they can be rented out more frequently. As a result, the annual return on a short-term rental property can be significantly higher than that of a long-term rental.
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Flexibility: With short-term rentals, you have the flexibility to choose when and how often to rent out your property. This allows you to adjust your rental schedule according to demand, which can help you maximize your returns.
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Diversification: Investing in a short-term rental property can provide diversification for your investment portfolio. It can add a new source of income, and provide a hedge against potential downturns in other investments, such as stocks or bonds.
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Tax benefits: owning a short-term rental property can provide tax benefits. the rental income is considered as business income and hence, you can claim all the expenses related to the property as deductions.
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Location: Short-term rentals are often located in tourist destinations, which can provide a steady stream of demand from travelers. Additionally, they are also popular in urban areas, where there is a high demand for housing but a limited supply.
Overall, short-term rentals can be a profitable investment option in today's market, as long as you choose the right property in the right location. As interest rates rise, short-term rentals can provide a good return on investment and a hedge against potential downturns in other investments. And with a plethora of online platforms like Airbnb, Booking.com and VRBO, renting out your property is easier than ever before.
It's always advisable to consult with a real estate professional or a financial advisor before making any investment decisions.