Airbnb vs Long-Term Rental in Ontario: Which Makes More Money?

If you own a rental property in Ontario, you’ve probably wondered whether you’d make more money listing it on Airbnb or keeping it as a traditional long-term rental. The short answer is: it depends on your location, your property, your risk tolerance, and how much work you’re willing to put in.

Here’s a realistic comparison to help you decide.

The Revenue Picture

Short-Term Rental (Airbnb/VRBO) Income

Short-term rentals can generate significantly higher gross revenue per night compared to long-term rental rates. A property renting for $2,000/month as a long-term rental might generate $150-200 per night on Airbnb, which could mean $3,000-4,500/month at high occupancy.

But gross revenue is not profit. Short-term rentals come with substantially higher operating costs: professional cleaning between guests ($100-200 per turnover), platform fees (Airbnb takes roughly 3% from hosts, plus the guest service fee), higher utility costs (you pay all utilities), furnishing and supplies (initial investment of $5,000-15,000+), more frequent maintenance and wear, and potentially higher insurance premiums.

After expenses, many STR operators find their net income is 20-40% higher than long-term rental — not the 100%+ that gross numbers suggest.

Long-Term Rental Income

Long-term rentals generate lower but more predictable income. A tenant paying $2,000/month reliably for two years is $48,000 in gross revenue with minimal turnover cost. The tenant typically pays their own utilities, the property needs less intensive maintenance, and your time investment is dramatically lower.

The predictability of long-term income also makes financing and investment planning easier. Lenders prefer stable rental income when assessing your capacity for future purchases.

The Time and Effort Factor

This is where the comparison gets real for most Ontario landlords.

Managing an Airbnb property requires responding to guest messages (often within minutes for good ratings), coordinating cleaning between every stay, handling check-ins and check-outs, managing supplies and restocking, dealing with last-minute cancellations and booking gaps, maintaining a high review rating (your income depends on it), and seasonal pricing adjustments.

If you have a full-time job, a family, or other commitments, the operational demand of short-term rentals is significant. Many people underestimate this until they’re several months in.

Long-term rentals require far less ongoing attention. Once a good tenant is in place, your monthly involvement may be limited to reviewing your financial statement and handling occasional maintenance requests.

Regulatory Reality in Ontario

Short-term rental regulations vary by municipality in Ontario, and they’ve been tightening. Many cities now require registration or licensing for short-term rentals, limit the number of nights per year you can rent short-term, restrict STRs to your principal residence only, impose additional taxes and fees, and enforce penalties for non-compliance.

Before committing to a short-term rental strategy, check your municipality’s current bylaws. In some Ontario cities, operating an STR in an investment property (not your principal residence) may not be legal at all.

Risk Comparison

STR risks: Regulatory changes can shut down your operation overnight. Seasonal demand fluctuations can leave properties empty in slow months. Guest damage, while typically minor, happens more frequently than long-term tenant damage. Platform algorithm changes can tank your visibility. Competition from new listings can compress pricing.

Long-term rental risks: Tenant non-payment and the lengthy LTB eviction process. Property damage from a bad tenant (less frequent but potentially more severe). Vacancy between tenants (typically 2-4 weeks). Rent control limiting income growth on some units.

Which Is Right for You?

Short-term rental may be better if you have the time or budget to manage operations (or hire a manager), your property is in a high-demand tourist or business travel area, your municipality’s regulations allow it, and you’re comfortable with variable income.

Long-term rental may be better if you want predictable, low-maintenance income, you have a full-time career and limited time for property management, your property is in a residential area with strong tenant demand, and you’re building a portfolio where stability matters more than maximum revenue.

You Don’t Have to Choose Alone

Catana Property Management manages both long-term and short-term rental properties across Southwest Ontario. Our Standard and Rent-Guard packages handle traditional rentals, while our STR Management package covers full Airbnb/VRBO operations. If you’re unsure which model fits your property and your goals, book a Rental Readiness Call and we’ll walk through the numbers together.

Frequently Asked Questions

Can I switch from Airbnb to long-term rental (or vice versa)?

Yes, though switching from long-term to short-term requires furnishing the property and potentially navigating municipal regulations. Switching from short-term to long-term is simpler but means removing furnishings and finding a traditional tenant.

What’s the typical Airbnb occupancy rate in Ontario?

This varies dramatically by location and season. Urban properties in high-demand areas might see 70-85% occupancy. Properties in less tourist-driven markets may see 40-60%. The occupancy rate is the single biggest factor in whether STR income exceeds long-term rental income.

How much does short-term rental management cost?

Catana’s STR management fee is 20% of booking revenue, which covers listing optimization, pricing, guest communication, cleaning coordination, and maintenance. This is in line with industry standards for full-service STR management in Ontario.

Do I need different insurance for Airbnb vs long-term rental?

Yes. Standard landlord insurance typically does not cover short-term rental activity. You’ll need a policy that specifically covers commercial hospitality use. Some insurers offer hybrid policies. Always disclose your rental model to your insurer — an undisclosed STR operation could void your coverage entirely.