Renting out your home short-term can mean extra cash, but it's not always worth it

Kevin Makra is pictured preparing for guests in his Toronto Airbnb rental apartment, on Saturday, December 2, 2017. THE CANADIAN PRESS/Chris Young

If you search “Airbnb how to get started” you’ll reach their splash page with a big number. As of May in Toronto, Airbnb says you can make more than $4,000 per month during the FIFA World Cup.

It’s a powerful lure for someone who needs help with their rent or mortgage, and has a spare room to offer. But whether it’s Airbnb, Vrbo, booking.com or another home rental platform, Laura Whiteland, financial planner and owner of Inclusive Financial Planning in Truro, N.S., says prospective short-term landlords should go into the business agreement with open eyes.

“[Airbnb’s] product is not what you’re selling — they’re selling the services of the website, so they’re not in the same business you are going into,” Whiteland said.

“You’re the product in that scenario, because they need accommodations. That’s how they generate their revenue. So you’re being sold and you need to be honest with yourself about that too.”

In her experience working with clients who have any kind of rental business, it’s always more challenging than they expected. First of all, you have to follow the law, so you need to research your municipality’s regulations on short-term rentals. If you live in an apartment or condo, there may be restrictions there as well — check your lease agreement and condo bylaws.

The next major consideration is income and tax implications. Short-term rental income could bump you up into a higher tax bracket.

“Like any business, all the money you bring in is not all yours,” Whiteland said. “It’s usually the most dangerous thing to not understand.”

If your roommate is gone for the summer and you want to rent out their room for a few months, you might assume some home expenses can be business write-offs. But expense write-offs will be minimal, Whiteland said. In this scenario, the vast majority of the unit is still for personal use.

“[You need] a certain amount of understanding of what the tax impact is going to be, because it’s all going to be based on your exact situation,” she said. “Even just understanding the difference between renting a room in a small house versus renting in an apartment — it’s going to look different. And what you can claim is going to look different.”

First-timers might forget they have to hold back some of their short-term rental income to pay taxes the following year, said Kelly Ho, financial planner and partner at DLD Financial Group in Vancouver. If you own the unit with someone else, you might be able to split the income at tax time.

Short-term rentals should be considered a formal business, Ho pointed out, not a casual arrangement. This is not the same as family staying overnight.

In Vancouver, you need a business licence to operate an Airbnb, she said. You should research liability issues and contact your insurance broker to see how short-term rentals could impact your coverage. Will you clean the place, or hire cleaners? How will you impress your guests?

“You are now effectively a hotel owner, if that makes sense,” Ho said. “If the homeowner decides to run it themselves, then they need to put a value on what their time is worth. A lot of people underestimate the amount of time it takes to maintain.”

“You need to have a very good reputation,” she added. “All it takes is a few bad reviews and now your income is volatile.”

You are also at the mercy of changing regulations. Ho said she knows of people who — in the Airbnb “heydey” — repurposed their home for short-term rentals. They hired property managers and cleaners to run the operation for them.

“I think there’s a little bit of remorse because obviously now there are restrictions in terms of the number of nights, which is municipality dependent,” Ho said. “So now they’re banking on really, really high nightly rates to be able to make up for that.”

There will be a lifestyle cost as well, shifting your routines at home to accommodate strangers. Walking around in pajamas, late night snacking, noise from kids — Ho said her own family life would have to change if she were to rent out part of her home. And electricity costs will definitely go up, as guests likely won’t be as keen to conserve energy.

“But the biggest one I would say is time,” Ho said. “What is your time worth? Their value of time will dictate whether this is worthwhile for them.”

If you want to proceed, you can’t skim past the terms and conditions on the rental platform like every other website or app you are interacting with, Whiteland said. You’re on the hook for those legal requirements. And even with damage protection promises from the platform — which have their own disgruntled Reddit threads — there will be wear and tear on your home from additional use.

“It’s work. It’s effort. Even one Airbnb unit in your house is a job, and I think you need to approach it that way,” Whiteland said. “Like any type of self-employment, hopefully it pays off, but it’s not a guarantee.”

This report by The Canadian Press was first published May 18, 2026.

Nina Dragicevic, The Canadian Press