Hello everyone!
Welcome back to ‘Keeping it Real, Edmonton’, where we have on Real Guests to talk all about Edmonton Real Estate.
In today's post, we'll be sitting down and talking with local expert and short-term rental guru Kerry Singh to discuss Edmonton short-term rentals and the single-family property market, with predictions for the remainder of 2024 and beyond.
Q: How long have you been specializing in short-term rental properties?
[Kerry Singh]: “So I've been doing short-term rentals in the Edmonton market for approximately 8-9 years now. I started about two years before Airbnb really became mainstream – it's really changed a lot over the years. But, it's almost been a decade that I've been in this Edmonton short-term rental industry.”
Q: What types of properties do you usually deal with for short term rentals?
[Kerry Singh]: “For what I manage in Edmonton, I specialize in larger single-family homes. My niche would be a four bedroom or larger property. That being said, my portfolio does include some one bedroom, some two bedroom, some apartment style condos. Truly, it just really depends on what bylaws are in the condo. Condo buildings are complex because a lot of them don't actually permit true short-term rentals, but some of them do permit things that are more along the lines of mid-term rentals.”
Q: How do you define the difference between short-term rentals vs mid-term rentals?
[Kerry Singh]: “The commonly accepted definition of short-term in Edmonton […] depends on the guidelines set out by municipalities and provincial governments. Where I'm operating generally, anything that's 30 days or less is categorized as short term, and then anything that exceeds 30 nights would be considered long term from the government perspective."
"In my opinion, it's not until you get up to the 6-month or 12-month timeline that I would personally consider it more of a traditional, long-term rental. The mid-term space is where we'd see things like travel nurses, corporate stays, and a lot of insurance type displacement from primary residences.”
Q: Alberta has been undergoing lots of changes over the last few years, and a lot of people have seen the area as ideal to set up their lives there. Why do you think people are choosing Edmonton especially?
[Kerry Singh]: “Alberta is known to be very affordable in the scheme of things across Canada, Edmonton even more so than Calgary. Even so, Calgary does have a higher price point. Edmonton is truly seen as one of the more affordable Edmonton real estate markets in terms of the large major cities in Canada. When you layer on the resources that our market has, the job market, the infrastructure, it really does create that viable market for young families or people new to the country to move to get a good start. They're finding Alberta – and Edmonton specifically – to be very attractive from a quality of life perspective, because their dollar simply goes farther. Having that extra disposable income is […] quite enticing for sure.”
See Reference: Edmonton tied for 5th most affordable city for housing in world, Toronto, Vancouver, among least
Q: Do you think that the interest in short-term rentals has gone up as well as the interest in mid to long term rentals?
[Kerry Singh]: “From an investment standpoint, the Edmonton real estate market is pretty active. As a realtor, a lot of my clients are national. I deal with clients that are out of Ontario or out of BC, especially in the higher-priced market segment, where they're used to seeing price points in the millions where they're coming from – and then you come to Edmonton, and you can get the same kind of property for substantially less so the investment dollars go further in that regard for people traveling here. Alberta has some beautiful vacation destinations for sure – Edmonton's big draw would be things like sporting events, West Edmonton Mall. We have a lot of big name concerts in our city […] people are coming here very purposefully for those reasons, or they're passing through on their way through the mountains […] Where we are lacking in tourism, we are absolutely thriving in other reasons for people to come to the city.”
Q: What, if any, areas in Edmonton do you feel are over-priced in the world of short term rentals? Under-priced? And why do you think that might be? Does it have to do with population growth, or something else entirely?
[Kerry Singh]: “The way the Edmonton short-term rental market pricing is always going to work is the prices are going to be reflective of what people are willing to pay. […] If somebody [overprices] their rental people are simply not going to book it, and then they are going to start moving into the other areas. Now, with that being said, there are definitely peak demand times in different areas with proximity to the major draws into the city. For example, during hockey playoffs, during concerts, during major conferences that are going on downtown, the downtown core is going to have higher prices than, let’s say, the perimeter of the city. […] Anything that brings a large influx of people into a specific area is going to drive pricing up, But the pricing does correct itself very quickly if the owners are not seeing the reservations they were originally anticipating.”
Q: Some experts are predicting that the Bank of Canada may do yet another rate decrease further down the line, following two rate decreases back to back. Would you agree with this? If so, how would this affect short-term rentals in the future?
[Kerry Singh]: “The interest rates definitely have been a large pressure point for investors in the Edmonton short-term rental space. So, by the nature of seasonality within short-term rentals, we do have large fluctuations in revenue streams month over month or even quarter over quarter. When I am advising new short-term rental operators what to expect, I tell them you have to look at it from an annual perspective. […] One thing I have seen in the last 6-12 months is just an increased pressure, just the overall feeling of price pressures on some of the owners. If you’re able to lock in at a rate that you’re comfortable with, if you’re more cash sensitive or sensitive to the fluctuations in the market, it might be wiser to have that locked in rate to give yourself the stability, knowing what your expenses are going to be. Now, again, with that being said, because the professionals are forecasting the rates to go down, a lot of people are really looking forward to that and opening up some additional profit and revenue from their investments.”
Q: Over the last few years, there’s been a huge influx of people into the Edmonton market as we’ve mentioned. That said, oversaturation can be viewed as a problem in the real estate market – especially short-term. How would you pitch the market to new investors looking to enter at a time as volatile as now?
[Kerry Singh]: “I personally feel that market saturation is the sign of a healthy environment for the product to be operating in. If the restrictions are too intense, if the licensing requirements are too strong, if the municipal bylaws are unfavourable, people are not going to enter into that Edmonton market space as actively as if it was more favorable to them as an investment venue. Now, with that being said, in any market, whether its saturated or not, the best properties are always going to rise to the top. So, if the Edmonton market is saturated, it really forces the improvement of the industry as a whole. You’re going to get better properties, better management, and better guest experiences. Everything is just going to improve, because the ones that are not performing at peak levels are very quickly going to fall to the bottom, and then it’s not going to be a viable option anymore for the owner to operate that.”
Q: What are some predictions you have from a short-term rental perspective for the remainder of the year. Will things steadily improve? Or will it things reach a leveling out point?
[Kerry Singh]: “ne trend I do notice when analyzing the data set from our properties is that the vast majority of our bookings are from guests who have either never stayed in an Airbnb before, or their only on their first or their second stay. It’s not common for us to see a [repeat] guest with an Airbnb property 10 to 20 times. What that signals to me is that there are constantly new clients, new customers entering the Edmonton market space. So it’s still an expanding avenue for people to be entering in as guests, as paying customers.”
“I do see it continuing to pick up steam, for lack of a better word. With the improvement in the offerings, I think that’s going to build the customer confidence. One thing that guests have expressed historically is that there’s inconsistencies between Airbnb properties. […] There’s just no way of knowing, short of really analyzing reviews and entrusting it at face value, that that is what you’re going to get. I do think that, with the improvements in the industry, that people are seeing consistently higher outcomes from a larger proportion of hosts that are going to retain people within this platform.”
According to AirDNA, the average occupancy rate in Edmonton is 60% and the average nightly fee is $128.50. There are currently 2817 listings with 78% on Airbnb, 6% on VRBO, and 16% on both platforms. 20% of these are private rooms and 79% are entire homes, and it is somewhere between 0 and 1% that are shared rooms (shown as 0%). Pear Properties is currently managing 51 listings, they have 1684 reviews, and 4.73/5 star rating. Average revenue of a short term rental in Edmonton is $20700
Q: What piece of advice would you give to a new, aspiring investor who are just a bit unsure about the market?
[Kerry Singh]: I work with a lot of investors that are looking to purchase short-term rentals that are looking to start them up, especially if they’re out of province. The biggest thing that I can convey is to make sure that you’re finding the right people in the Edmonton market that you want to operate in to partner with. Interview short-term rental hosting companies to understand who best meets the needs of what you’re looking to accomplish. Who is most similar to you? Who do you feel you can have open communication with? [Make sure] that you truly understand the costs in starting a short-term rental.[…] go in with your eyes open. Ensure that you’ve got 3-6 months worth of carrying costs in the bank. […] You need the comfort to properly screen the guests, to maintain your property in very good standard, and not expose yourself to negative incidents.
Kerry Singh is an award winning REALTOR® affiliated with Century 21 Masters in Edmonton, Alberta, and boasts a robust portfolio as an active Real Estate Investor. With a primary focus on serving investors, both local and from afar, she draws on her own personal experiences as an investor to guide her clients through their real estate transactions.”
- [Kerry Singh - LinkedIn, About, https://www.linkedin.com/in/kerry-singh-7b47a328/?originalSubdomain=ca.]
Kerry is also the Founder and President of Pear Properties, where she specializes in short-term real estate. You can find Kerry and Pear Properties at their website: https://www.pearproperties.ca/ or on Facebook and Instagram. Kerry can also be contacted via her email directly: kerry@pearproperties.ca.
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