Airbnb vs Long-Term Rentals in Ontario: What’s More Profitable in 2025?

Airbnb Profitability in Ontario (2025)

As we move into 2025, Ontario landlords and real estate investors face an important question: Should you focus on Airbnb and short-term rentals, or stick to traditional long-term tenants?

With changing housing market trends, evolving regulations, and shifting tenant demands, understanding the pros, cons, and profitability of both strategies is crucial for anyone looking to maximize their investment returns.

This article takes an objective look at Airbnb vs. long-term rentals in Ontario in 2025, focusing on current profitability, market trends, and regulatory impacts.

Airbnb and other short-term rental platforms continue to be a popular strategy for maximizing rental income, especially in Ontario’s high-tourism regions.

According to Airbnb’s Economic Impact in Canada, Airbnb generated over $10 billion in economic activity in Canada in 2023, with a significant share in Ontario. This demonstrates the massive demand for short-term rentals, especially in areas with strong tourist appeal like Niagara Falls, Toronto, and Ottawa.

Further data from Business of Apps’ Airbnb statistics shows that Airbnb revenue continues to grow worldwide, suggesting sustained demand into 2025.

However, it’s important to note that Airbnb profitability is highly seasonal and location-dependent. Success in cities like Toronto may not be mirrored in smaller towns, and occupancy rates can vary greatly depending on tourism trends and local competition.

Moreover, owners must manage high guest turnover, frequent maintenance, and marketing efforts, which can affect net income.

Long-Term Rentals: Steady Income and Stability

Long-term rentals remain a cornerstone of Ontario’s housing market, offering predictable and stable monthly income. For investors who prefer lower turnover and consistent cash flow, this strategy remains a reliable investment choice in 2025.

According to Canada Mortgage and Housing Corporation (CMHC) Rental Market Report, vacancy rates in Ontario remain low, especially in mid-sized cities such as Belleville, Kingston, and Peterborough. This indicates strong tenant demand and stable rent growth, even as housing prices continue to rise.

Long-term tenants typically sign 12-month leases, providing landlords with guaranteed income over a longer period and fewer administrative tasks compared to managing nightly guests.

Furthermore, in secondary markets and smaller urban centers, long-term rentals often outperform Airbnb in terms of consistent occupancy, without the uncertainties tied to tourism and seasonality.

To understand where long-term rentals are in highest demand, investors can explore available regions on Ontario-focused platforms such as the Areas We Serve page.

Regulations Impacting Airbnb and Long-Term Rentals

Short-Term Rental (Airbnb) Regulations in Ontario:

• In many cities, only primary residences are allowed to operate as short-term rentals.
• Registration and licensing may be required at the municipal level.
• Payment of Municipal Accommodation Taxes (MAT) is mandatory in various jurisdictions.
• Hosts must comply with local zoning, safety, and insurance regulations.

These restrictions limit the number of properties that can legally operate as Airbnbs and increase operational complexity.

Long-Term Rental Regulations:

Long-term rentals are governed under the Residential Tenancies Act (RTA) and subject to Ontario’s Rent Increase Guidelines. While this imposes tenant protection rules and rent caps, long-term rentals avoid many of the licensing and taxation challenges facing short-term rentals.

Additionally, landlords must remain updated on housing market trends — such as those shared by Ontario Real Estate Association (OREA) press releases — to understand how shifts in demand might impact rental income.

Cost Comparison: Airbnb vs. Long-Term Rentals

Airbnb Costs:

• Platform fees (usually 3% to 15% per booking).
• Professional cleaning and maintenance for each guest turnover.
• Higher insurance premiums for short-term use.
• Furnishing and ongoing supplies (e.g., toiletries, linens).
• Marketing and listing management to remain competitive.
• Municipal taxes and licensing fees (MAT, registration).

Long-Term Rental Costs:

• Property management fees (typically 8% to 12% of monthly rent — more details on pricing here).
• Ongoing maintenance and repairs, generally lower than Airbnb due to reduced wear and tear.
• Tenant placement and screening fees.
• Legal and administrative costs for lease agreements and compliance.

While Airbnb may bring higher gross monthly income, its operational costs and regulatory obligations often reduce net profitability. In contrast, long-term rentals offer more predictable returns and lower daily involvement.

Final Thoughts: Which Rental Strategy Makes Sense in 2025?

Choosing between Airbnb and long-term rentals in Ontario in 2025 depends largely on property location, owner preferences, and risk tolerance.

Airbnb may provide higher short-term profits in prime tourist locations, but comes with greater complexity, higher costs, and regulatory hurdles.

Long-term rentals offer stability, steady income, and lower day-to-day management, making them a preferred choice for investors focused on passive income and long-term growth.

For those considering long-term rentals, working with a trusted local property manager can simplify the process of finding and managing tenants while ensuring compliance with Ontario’s laws. Companies like Blue Anchor Property Management, for example, offer transparent pricing ranging from $99 to $221 per unit per month depending on the package, with a Platinum Plan available at $289. This pricing clarity helps landlords plan their expenses confidently — view full pricing details here.

If you’re exploring long-term rental opportunities, you can contact us directly to learn more about what’s included.