Been a very long time since I logged in, but realized a ton of very smart people belong to 2p2, so decided I'd ask the poker community's opinion on this.

I currently own some rental properties in Edmonton, and am considering divesting 1 of them for a 'vacation property' (would be in Okanagan, in canada still). I'm still young, and work a ton, so ideally would have it rented out 90% of the time while occasionally using it personally.
The area I'm looking at is a very popular tourist destination. I've run the numbers and they're attractive.

My question is, does anyone already do this? What are pros and cons? , my concerns are logistics of running an AirBnB remotely (10 hr away), if anyone does this, how do you manage it?

On a side note, anyone else in Alberta afraid of the oil industry getting hollowed out? Without the flow of money, is Alberta poised to fall, similar to Detroit with the auto industry.

You'll need to give 20-30% to an agent to manage it for you. It makes the most sense if you've got a desirable, nicely kitted out pad that's likely to be in demand most of the year, that you can get premium prices for. Beyond that it's somewhat iffy (renting is safer and returns about the same, all considered), but it makes sense if you want it for yourself at non-demand times of the years.

Are there agents that specifically deal with AirBnB?

Depends on the city, but usually. They advertise on these sites for you, including vrbo, etc. Plenty of real estate agents (and specialist companies) manage holiday lettings for 20-30%. They handle the queries, take the bookings, organize and pay cleaning, keys, security deposits etc. You just get a bank deposit and a damage report.

If you don't want to go that route, you need someone to clean the place for 2-4 hours after each booking (essential) and meet guests (preferred but you can get around it with keysafes for example). So you can do it yourself if you're willing to take bookings yourself and can find a reliable maid or holiday let service reliably available at odd chunks of hours on sometimes short notice (for example, you'll have back-to-back changeovers from say 11 to 4 if your bookings start filling up, and someone needs to be there to clean). Depending on how much the going wage is and what your turnover is like, you might save 10-15% compared to the agent, in return for more hands on (taking the bookings yourself, handling everything) and some headaches. Or you might not be better off at all. You might miss bookings if your phone is off or you only take emails, you might get ripped off with the key in a key safe, your cleaning lady might get sick or quit and necessitate a lot of bull**** to find someone else quickly...

No, I live in Alberta. The current downturn in oil is nothing compared to Detroit and what happened with the auto industry.

Im not saying now, think 10 years down the road. It takes time to gut an industry.

I don't see oil jumping back up to 100/barrel unless there is some massive supply disruption. There are too many players ready to pump once it goes to 50-60 that it'll quickly soak up any demand.

That said, our industry is largely unconventional plays, in situ and open mines. Which is costly and therefore not economically viable, especially with current fed/prov government. What I'm seeing longer term, 5 years+, is big players moving to other areas globally, and leaving alberta behind, think of the pain alberta is having just trying to convert 1 pipeline in quebec for dilbit. I also see longer term (20+ years) declines in oil demand (Saudis have already openly stated they eventually need to exit the oil industry). Don't get me wrong, I am heavily invested in Alberta, and don't want to see this happen...

What makes you think this is just a temporary down turn, and not more permanent?

If you believe this, why not get out while you can? Plenty of growing, vibrant, stable cities that you never have to worry about to stick your money in and watch it grow.

In rents especially you run into the issues of last-10% demand affecting prices a lot.

I was just presenting my argument about the economic climate, just seeing what others think about it. I'm not 100% convinced either way just yet.

Up and moving isn't as easy as it sounds, I've got 2 kids, family, houses, and a business to run. But it never hurts to dip your foot in another pool to see how the water is.

If you've a nice place charge slightly less then hotel rates..Just make sure to throw in a high security deposit. It's illegal for condo units but I think there is a workaround for that.

You need to check up your local laws too, airbnb is considered unfair competition to hotels in some part of canada(like quebec). I have no clue about edmonton.

Food for thoughts :
- use a numerical lock so you can give access when tenants need to.
- Professional pictures
- You need someone you can trust on the spot, not an hired agent but a friend or family.
- as someone suggested earlier, you could manage yourself but will need a lot of time, also always get 2 maids or have a back up managers, if one quits you already have a replacement in place.

I'm not an expert and there are a lot of people on this forum that can answer the question better then me but I will give it a shot.

Its a supply gut not an industry gut. Companies are just becoming more innovative and cutting costs with these tight margins.

With this logic why was oil ever over 50$.


These companies have billions invested into these projects and there is a lot of oil in the ground theyre not just going to leave, its not the same as auto makers packing up and relocating their plant to a different location. Government issues are a concern and there is certainly a need for more pipelines but politicians aren't stupid if they want to stay in power they're going to need to be built, Notely already said shes isn't agreeing to a Carbon Tax unless a pipeline is approved. Hopefully the Keystone gets built.

What makes you think oil demand is going to decline over the next 20 years?

I'm downtown Toronto. Going away for 2 weeks over Christmas. Debating renting out our 1br+den condo.

Careful renting your own place. This happened in Calgary recently...

http://calgaryherald.com/news/local-...hed-their-home

This is fabulous:

The only reason it was over $50 is simple: supply and demand. Fracking wasn't allowed in the states, they had billions locked in the ground, then the goverment, so the states accounted for an extra 1-2million bpd, Iran was locked out until recently, accounting for another 4 mil bpd. Sluggish supply combined with china's incredible growth caused a sustained boom. Of course it overshot, leaving us in a current supply glut.

The jobs that come from the oil industry aren't from already operational projects, most jobs in Alberta's oil industry are from constructing these projects. There are a bunch of projects that have been shelved due to current economics, it'd require oil coming back to 70-80 to make them viable. However, at 50-60, a bunch of idle supply comes in from the USA. Also, the Saudis have extra supply.
My point is, Alberta is a high cost oil producer, and we are faced with excess supply and lower cost producers ready to jump in at certain price points. Thus, the only thing that might get us there is a huge increase in demand.

That brings us to long term oil forecast. Although we will always use oil in some form (energy, plastics, lubricants, etc etc), I think our global economy is moving away from oil. I look at companies like Tesla, which is just fantastic what they're trying to accomplish, against all odds, not only do they need to build electric cars...but they need the range, charging stations, replaceable battery packs, and slick cars that'll actually sell... and they're doing it, in a short span of time. I'm not saying it'll be tesla leading us away from oil dependency, but I am saying they will be part of it.

Given this, it sounds like my only option would be to hire an agent. I live 10 hrs away from kelowna/Okanagan area, and am busy with my own business to do any of the operating.

I will have to do some research and look at the numbers again to see if they make sense.

The general wisdom is not to manage properties from a distance. I can tell you from personal experience that that's good advice. There's no substitute for an owner being in the same city.

That said, in the right place, which you buy at a cheap price and where you're getting good booking prices and decent booking levels much of the year, you can do very well out of holiday let rentals. It's really about having the most desirable mid to high end around, and you'll find yourself filling up. A lot of that is location and charm and furnishing and little touches, and not property purchase price necessarily. I was making 12% on my money after costs for a couple of years on high end (but in a cheap area) property before deciding it wasn't worth it.

I thought you were worried about Alberta becoming the next detroit but it seems your worried if it will ever become the boom province it once was.

A large % of those construction jobs were filled with people from out of province/country. The East Coast is hurting a lot more then AB. How long have you been in Alberta for?

Been in Alberta my whole life.

I'd be fine with steady growth, no boom, just healthy economics. We have had 2 straight YEARS of recession. That's a very long time for any country/state, sadly its expected that the rebuild of ft.mac that'll provide some positive growth next year. My point is still the same, an industry left out for some period of time (whatever the reason) will find another place to do business.

Oil companies are still making money. Suncor beat profit expectations for Q3 and have costs at 22$/bbl. I work for one the biggest energy companies in the world, we're at about 30$ with a goal to get to 18$. The CEO was here a few months ago and is investing 2 Billion over the next year for our facilty. It might be a while before we see another 15B mega project but that doesn't mean Alberta is going to turn into Detroit.

Shifty86,

Dude you hijack every thread and somehow get fixed on Alberta oil. Reality is no one cares about your biased opinion - you're a single data point who is inherently biased based on their own work. And before you dismiss me as another mother earth hippy, I actually owned a welding and fabrication business in Lloydminster AB since 2014 that had very large contracts with CNRL/Husky so yes I was in the heart of operations (at least a part of the supply chain). I have had a pulse in the market and it has fundamentally changed in the last year and will never revert back to 'status quo'. Every large scale macro trend supports this. I currently own a crapload of BTE stock because I believe there is still value there, but it's not something to truly think about as a long-term investment anymore. But even still, you constantly shill your opinion as if trying to convince a neutral observer that Alberta oil sands/jobs matter. They DO NOT and the world is already shifting, and yes a lot of those jobs will go in time, as they should when the world is progressing and more efficient energy sources become available. We're still using oil, and will be 10 years from now but you really need to wake up. I realize that's likely hard for you because as someone who was also living in Alberta the cognitive dissonance is extremely strong there and group think is alive and well.

Soon as the economics make even more sense, it will be cast off and no one will care about you, your company, my BTE stock, a company like mine, or any other Alberta Oil sands stakeholder. I'm not asking you to change your views or even debate them (and to be honest I really don't care about your views, nor do I likely think you care about mine) I'm asking you to quit clogging every thread about it with it whenever you have a chance to thrust them onto other peoples' ideas/threads (An example being: this is about an air BNB rental in BC, where some posters are actually contributing to the OP)

Direct question from OP.


"On a side note, anyone else in Alberta afraid of the oil industry getting hollowed out? Without the flow of money, is Alberta poised to fall, similar to Detroit with the auto industry."


I live in AB and been in the industry for 10 years thanks for your input though.

Specifically with respect to AirBnB and similar platforms, I would be worried a bit about regulatory risk, i.e. cities continuing to crack down on short term rentals (or at least make noise about it). In places were the hospitality industry has a strong lobby with local officials, I think there's real risk of bylaws being implemented to at worse completely shut down the short term rental business, and at best use scare tactics and propaganda so that the number of people willing to use the service will decline (and your rental price will decline similarly with the demand).

This just reduces competition. The toothless local-government laws are for rattling their paper sabers in most instances. For the other instances, you just drag your feet, appeal, delay any potential hearing, appeal, and years have passed before any force is applied, by which point you've already sold the property and banged the mayor's wife.

I've been getting "final notice" letters in the mail from a state agency for 20 months now. I just put each one right in the trash.

I'm noticing a pattern...