Pricier vacation permits

Sparki55
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Re: Pricier vacation permits

Post by Sparki55 »

cv23 wrote: Oct 13th, 2021, 5:40 pm What about the cost of police or Bylaws to deal with the issues that have become far to common with STR's? Why should all residents pay for the issues caused by a STR operator?
Do the STRs that don't have a police and bylaw issues get a reimbursement? Lol... That's like asking a bar to pay extra for all the drunks it creates... Or a boat rental company to pay for boating accidents...
polelady
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Re: Pricier vacation permits

Post by polelady »

What is a STR for ? here is from a goggle search https://www.bing.com/search?q=what+is+a ... 8971267665

Love when people think we all understand their tic toc vocabulary ?
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cv23
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Re: Pricier vacation permits

Post by cv23 »

polelady wrote: Oct 13th, 2021, 6:36 pm What is a STR for ? here is from a goggle search https://www.bing.com/search?q=what+is+a ... 8971267665

Love when people think we all understand their tic toc vocabulary ?
An STR is for accommodation.
STR is nothing to do with Tic Toc or any other language but rather a simple and VERY commonly used abbreviation for Short Term Rental used by people who have a basic knowledge of the subject when discussing it.
seewood
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Re: Pricier vacation permits

Post by seewood »

I know the argument it's my house I can do as I see fit, but like our new neighbors, who live in the lower mainland and purchased the house here as an investment and need the STR income to pay the mortgage, people using houses as an investment and not a residence, have made the area pretty much unaffordable to any that want to live here full time.

If the RTB would give back some of the landlords ability to punt lousy renters, perhaps there might be more long term rentals.

The RDOS I'm sure love the increased property taxes as noted by their continual hiring of staff, but the local school is running on less than a hundred students K-5, and fire department is always struggling to fill the ranks for a staffed response to an incident.

House across the street is going on the market before long, wonder what manifestation will it become?
I am not wealthy but I am rich
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cv23
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Re: Pricier vacation permits

Post by cv23 »

If the RTB would give back some of the landlords ability to punt lousy renters, perhaps there might be more long term rentals.
Also making wanna be hoteliers follow the same rules and regulations as actual hoteliers would result in hundreds if not thousands of STR( Short Term Rental's for the uninformed) units enter the long term rental pool which would help immensely with availability and with an abundant supply affordability would follow.
soupy
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Re: Pricier vacation permits

Post by soupy »

Sparki55 wrote: Oct 13th, 2021, 3:55 pm
soupy wrote: Oct 13th, 2021, 3:02 pm If the costs associated with ensuring a business is up to standards increases, then so should the license. The City shouldn't be out of pocket for inspections and administrative work costs related to approving legit STRs.
For $2,500 I would expect the inspection and administrative work to take ~30 hrs. It's less than 5 hours to complete an inspection and the remaining 25 hours are not required to do the paperwork. That's assuming an $85/hr charge when it's likely closer to $65/hr to cover the costs, the city shouldn't make a profit.
Hey Sparki55. You forgot to quote my question I had asked.

Do you pay income tax on your STR profits? Yes or no?
BC Landlord
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Re: Pricier vacation permits

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cv23 wrote: Oct 14th, 2021, 10:01 am Also making wanna be hoteliers follow the same rules and regulations as actual hoteliers would result in hundreds if not thousands of STR( Short Term Rental's for the uninformed) units enter the long term rental pool which would help immensely with availability and with an abundant supply affordability would follow.
And that's a myth. Most of those will never see the rental market again. LT and ST rentals are two entirely different business models.
Sparki55
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Re: Pricier vacation permits

Post by Sparki55 »

soupy wrote: Oct 14th, 2021, 11:22 am Hey Sparki55. You forgot to quote my question I had asked.

Do you pay income tax on your STR profits? Yes or no?
Cuz I didn't feel the need to answer lol.

My STR isn't available on the market yet, if I go ahead with the renos to bring it up to a quality rental then I will be including the income on my 2022 taxes. Right now I am debating not bothering because of the higher cost to get a license.
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Re: Pricier vacation permits

Post by soupy »

Sparki55 wrote: Oct 14th, 2021, 12:26 pm
soupy wrote: Oct 14th, 2021, 11:22 am Hey Sparki55. You forgot to quote my question I had asked.

Do you pay income tax on your STR profits? Yes or no?
Cuz I didn't feel the need to answer lol.

My STR isn't available on the market yet, if I go ahead with the renos to bring it up to a quality rental then I will be including the income on my 2022 taxes. Right now I am debating not bothering because of the higher cost to get a license.
Well you said earlier you could make $6000 a year.
Last time I checked that easily covers the cost of the $2500 license fee.
Best of luck
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cv23
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Re: Pricier vacation permits

Post by cv23 »

And that's a myth. Most of those will never see the rental market again. LT and ST rentals are two entirely different business models.
Who said they were the same in any way?
Most STR's are condo type units. If STR's were no longer allowed or the numbers drastically reduced due to legislation, as they should be, what would happen to those thousands of condo units presently STR's?

Either they would be sold, reducing the price of condos with so many on the market thus making condos far more affordable to purchase, ownership would be retained by the units becoming part of the long term rental pool to cover the mortgages or the the units would sit vacant with the owners paying not only the entire monthly mortgage but also vacancy tax out of their own pockets each month with no rental income.
The first two scenarios are the most likely and would definitely help both availability and affordability in purchase and long term rental markets.
What are other possible scenarios where none of these thousands of units would become more available and more affordable to the housing market?
Sparki55
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Re: Pricier vacation permits

Post by Sparki55 »

soupy wrote: Oct 14th, 2021, 1:06 pm Well you said earlier you could make $6000 a year.
Last time I checked that easily covers the cost of the $2500 license fee.
Best of luck
$6,000 is the yearly revenue. This assumes 60% occupancy from May to September.

The cost to renovate the space to meet code and comfort requirements is around $8,000.

With a $700 a year license and cost to operate around $950 for the year the profit is around $4,350. Payback on investment would be 1.5 - 2 years.

With a $2,500 a year license and cost to operate around $950 for the year the profit is around $2,250. Payback on investment would be 3-3.5 years.

Then there is my time, it will take about 1-2 hours per checkout to clean and remake the suite for the next couple. Averaging the stays to 2.5 nights each means I will spend 54 hours a year working to operate the unit. That works out to $80/hr once the ROI is completed for option with $700/yr and $41/hr for the $2,500/yr fee.

$41/hr sounds great when you assume no repairs, maintenance, damages, and other charges plus paying income tax. It almost makes it not worth it to go ahead with it.

Much more to a business that just pay license and profit!

Thanks for the good wishes!
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Re: Pricier vacation permits

Post by BC Landlord »

cv23 wrote: Oct 14th, 2021, 1:38 pm Most STR's are condo type units. If STR's were no longer allowed or the numbers drastically reduced due to legislation, as they should be, what would happen to those thousands of condo units presently STR's?
Hmmm, .. nothing spectacular. They would be sold on the market, but there is a slim chance of them seeing rental market again in any form. Just because of governments' increasingly draconian rental regulations. There are actually not that many STR's to make any significant impact on the long term market. Same for buyers.
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Re: Pricier vacation permits

Post by soupy »

Sparki55 wrote: Oct 14th, 2021, 2:32 pm
Much more to a business that just pay license and profit!

Thanks for the good wishes!
Oh I know there is a lot to it.
But I still don't have a problem with $2500 annual fee for running a STR for vacationers.

I think we both agree the RTB needs an overhaul to protect landlords who rent long term though. :130:
Sparki55
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Re: Pricier vacation permits

Post by Sparki55 »

soupy wrote: Oct 14th, 2021, 3:15 pm But I still don't have a problem with $2500 annual fee for running a STR for vacationers.
Yeah, I hear you. You're picturing the luxury residences no doubt. I was looking to offer a discounted room for people who travel cheaply. Was looking at $80-90/ night which you won't get at any hotel in town.

I've used Air BnB to travel when travel otherwise would not be an option due to costs.

If I do choose to go for my little business despite the increased license fee, I'll just have to pass that cost onto customers. End of the day, I make the same $$$ as long as the business case is there at an increased nightly rate and the city takes the extra profit.

To me, that's a government trying to control more than it should. I believe there should be just enough intervention to keep things fair and beyond that let it be. We disagree on what is fair to charge the little guy with a basement suite trying to make an extra $4,000 a year.
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cv23
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Re: Pricier vacation permits

Post by cv23 »

There are actually not that many STR's to make any significant impact on the long term market. Same for buyers.
The amount of STR condos is astronomical and account for the vast majority of condos which have been built in the last decade. The number one selling feature in new condos developments is that STR's are permitted and there is absolutely no shortage of buyers for these units. These are not mostly two and three bedroom family homes but rather predominantly one bedroom units to be used as hotel rooms.
Developments where STR's are not permitted rarely even get built these days and if they are built often languish on the market for months if not years. Developments that permit STR's are usually ten times the size, sell out in days if not hours and are going up everywhere. STR condos are what has driven the Okanagan condo construction boom for the last decade and will continue to be as long as they are permitted.

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