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Whether you’re just beginning the search for the perfect property or already in the throes of setting up your first short term rental, you’re likely evaluating your finances.
Hosting a short term rental is highly rewarding, but it comes with a unique set of operational challenges. Navigating booking platforms, managing guest expectations, and the overall price of operating might catch you off guard. If you’re doing your research, here is a breakdown of the “hidden” costs that often sit just below the surface.
Licensing & Compliance
Depending on where you’re located, you’ll need to apply for a Short-Term Accommodation (STA) licence through your local municipality.
- In Canada, an STA license can cost between $100 – $1000 annually.
- An additional fee might be added if your municipality requires Fire and Building Code inspections.
Don’t forget: You are also responsible for specialized insurance and declaring your rental income tax. Keeping up with these shifting local regulations is a vital—though time-consuming—part of the job.
Read more here: CRA Rental Income Guide
Professional Listing Fees
Professional photos are a must if you want to make your rental stand out. Expect to pay for a visit from a specialized photographer and the licensing of those images.
Non-Professional vs. Professional
Software & Platform Commissions
Booking platforms provide the audience, but they also include service fees for every reservation. These vary significantly:
Platform Typical Commission
| Airbnb | 3% of the reservation subtotal |
| VRBO/Homeaway | 3% payment processing + 5% commission fee |
| Booking.com | Ranges from 10% to 25% (Global average is 15%) |
The Inventory Cycle: Supplies & Replacements
Consider what essentials you’ll provide. These aren’t “one-time” purchases; they require constant inventory management and restocking:
- Consumables: Toilet paper, shampoo/conditioner, soaps, paper towels, cooking oil, and coffee.
- The “Errand” Factor: Beyond the cost of the items, remember to account for the time spent shopping and restocking between guests.
Some items are “single purchase” at first, but high turnover means they need to be replaced more frequently than in a private home:
- High-Wear Items: Cutlery, wine glasses (which break!), bath towels, and bed linens.
- Pro Tip: Towels and sheets get stained; it’s simply part of the business. Successful hosts always keep a “backstock” ready for quick turnovers.
Maintenance, Wear, and Tear
The truth is, if you’re getting renters (yay!), wear and tear happens (boo!). An overworked coffee machine or a worn-out sofa bed are generally not covered by platform insurance policies (like AirCover) and are considered standard operating expenses. Expect to budget for these replacements out of pocket.
The Logistics of Cleaning
Don’t underestimate how long it takes to complete a full guest turnover: stripping beds, laundry, vacuuming, and sanitizing every surface.
- The DIY Cost: If you’re doing the cleaning yourself, you are paying with your time—often during your weekends or mid-day breaks.
- Cleaning Products: You’ll go through laundry detergent, dishwasher pods, and specialized cleaning fluids much faster than you would in a typical household.
- A Pro-Tip: Be prepared to photograph each room before the arrival of every guest in case you need to file a damage claim.
Unforeseen Circumstances
Life happens! If the dishwasher stops working, you’ll need to arrange to fix it. If it doesn’t get fixed during their stay, your guests might ask for compensation.
- Pro-Tip: To minimize downtime and stress, make sure to have a list of reputable handy persons in your area at your fingertips so you can act quickly when emergencies arise.
Documentation: To file a successful damage claim, you should ideally have photos of each room from the day of arrival to prove liability. This adds another layer of administrative work to every single check-in. Read more about Airbnb’s Aircover terms here.
The 24/7 Reality: Managing Operations
No matter how prepared you think you are to run your short-term accommodation, the time it takes to fully operate a rental is inconceivable until you’re in the full swing of it.
- Guest Communication: Speed is everything. Hosts who respond within one hour see 25% higher conversion rates.
- Vetting & Inquiries: You’ll lose out on bookings if you don’t accept quickly. In fact, improving your response rate from 89% to 100% can increase your total bookings by over 110%.
- The Turnover Grind: Professional cleaning for a standard 2-bedroom condo typically takes 3.5 to 4.5 hours per stay. If you’re self-cleaning, that is time you can’t spend elsewhere.
- Pricing & Research: Manual market research and price adjustments take most hosts an average of 2–3 hours per week just to stay competitive.
- Unexpected Emergencies: From broken dishwashers to filing damage claims with Airbnb’s Aircover (which requires documented photographic proof from the day of arrival), the administrative load is constant.
The Bottom Line: Your Time
No matter how prepared you think you are, the time it takes to fully operate a rental is inconceivable until you’re in the full swing of it. From communicating with guests and vetting inquiries to responding to emergencies and scoping out market pricing, it is a significant commitment.
If you have the time to invest in these details, you now have some sound considerations to help you get started on the right foot. However, if you are still interested in the investment but need a partner that can maximize your ROI and save you time, Breathe Vacation Rentals is here to help you navigate the journey.