Short-term rental hosts in Toledo, Ohio may soon require a permit to legally operate in the city as part of new Airbnb regulations.
According to the City Council members, this is a measure intended to protect residents and build a better relationship with property owners in the Toledo real estate market.
What the Proposed Toledo Airbnb Regulations Look Like
Should the legislation be accepted and introduced into law, the annual permit will cost operators a $50 fee and apply to units that are being rented out for 30 days or less. And that includes properties listed on short-term rental sites like Airbnb and Vrbo.
According to the proposed Toledo Airbnb regulations, short-term rental applicants must show proof of general liability insurance at a minimum of $1 million and be on a payment plan for utilities and taxes. Property owners who then go ahead to rent out rooms without a legit permit would be liable to a $100 fine per week.
The new Airbnb rules would also include additional regulations like a maximum occupancy limit such as two occupants in each sleeping room as well as extra two guests per property. In addition, the Toledo City Council will introduce new safety standards to include carbon monoxide monitoring and fire safety.
As an operator in the Toledo real estate market, you would also have to provide the contact details of a local representative who would be on ground to take care of complaints within 45 minutes of request.
What Happens With Short-Term Rental Investors in Toledo Real Estate
Generally speaking, investing in rental properties in Toledo, especially short-term rentals, should not be a problem even in the face of a potential Airbnb regulation. Toledo City Council members like Katie Moline echo the same sentiment. When asked about the impact of the legislation on short-term rental owners in Toledo, she says:
This should not disrupt normal and intended uses of services such as Airbnb and short-term rentals. We’re really focused on ensuring safety and accountability.
Whether this proposed legislation eventually gets implemented or not, Toledo will still remain a viable investment destination for both traditional and short-term rentals as evidenced by the real estate data from Mashvisor below.
- Median Property Price: $108,000
- Average Price per Square Foot: $86
- Traditional Rental Income: $876
- Traditional Cash on Cash Return: 5.83%
- Price to Rent Ratio: 10
- Airbnb Rental Income: $1,816
- Airbnb Cash on Cash Return: 8.08%
- Airbnb Occupancy Rate: 64%
As the country recovers from the Coronavirus pandemic and with markets returning to their pre-COVID-19 levels, Toledo has proved to be one of the best places to invest in real estate at the moment.
According to nationwide real estate data analysis conducted by Mashvisor, the Toledo, Ohio real estate market offers one of the highest return on investment for both short-term and long-term rental properties.
With an Airbnb rate of return like this, even some extra costs as outlined in the proposed Airbnb regulations will not comprise the profit of hosts in the Toledo market. So, the city can be a great choice for people looking for how to start an Airbnb business.
What Makes Toledo Such a Hot Market for Airbnb Rentals
Toledo real estate has been one of the most overlooked markets in the country, but many investors are now starting to see why it is one of the best places to buy rental property nationwide. Here are some reasons why:
Tourism in Toledo Is a Big Deal
Toledo visitors spend roughly $900 million every year. And the tourism industry brings in a whopping $2 billion in income into Lucas County, where Toledo is located. People come in for both business trips and tourism attractions like Walleye and Mud Hen games, the Toledo Museum of Art and Glass Pavilion, and the Toledo Zoo.
According to Richard Nachazeel, president of Destination Toledo Inc., revenue from daily trips in Ohio stands at an average of $114 and can increase to $250 and $350 if the visit extends overnight. Meanwhile, Airbnb data analysis by Mashvisor places the Airbnb nightly rate at $86.
As a result, buying Airbnb rental properties can be a profitable investment decision. And with the COVID-19 vaccine being rolled out, the City of Toledo should see even more tourism activity in the coming months regardless of the Airbnb rules and regulations.
In preparation, real estate investors will likely take advantage of the lower property prices right before they go up. And for new investors, it will help to get familiar with general Airbnb host tips to help operate a successful short-term rental property.
Toledo Is One of the Most Affordable Real Estate Markets
Although prices of homes are generally high in the U.S., the median price of properties went even higher despite the COVID-19 pandemic, soaring up to $370,000. As a result of the high prices, it is easy for people to miss out on investing in real estate if they don’t have a lot of money.
Knowing this, the Toledo real estate market, as well as the general Ohio housing market, is one of the best places to buy rental properties if you are looking for affordable local rentals.
As shown above, the median property price and average price per square foot in the city are $108,000 and $86, respectively, which is way lower than home values in most cities in the U.S. This way, you can afford a smaller 20% down payment required to buy a house and get a mortgage for the remaining amount.
Housing Supply Trumps Demand in Toledo
Toledo real estate is a buyer’s market and, therefore, an investor’s dream as there are more houses in supply than demand, making it a great time to purchase rental properties. This way, not only will you be getting properties for reasonable prices, but you will also be avoiding bidding wars which are the hallmark of a seller’s market.
A strategy that many real estate investors adopt in this kind of market is to spend more time checking out properties, especially if they are not familiar with the local rental market. This increases their chances of finding good deals since it’s easier to negotiate prices for multiple similar properties on the market. So, overall, this year is a great time to place yourself on the Airbnb map of hosts.
Best Toledo Neighborhoods for Airbnb Investment
Mashvisor’s Heatmap: Airbnb Cash on Cash Return in the Toledo Market
Investing in the Toledo real estate market is much like most housing markets: some locations are better for owning an Airbnb property than other places. According to Mashvisor, a real estate analytics platform, these are the two top locations for Airbnb Toledo investment:
East Akron
- Median Property Price:$127,400
- Price per Square Foot: $103
- Average Airbnb Income: $1,452
- Airbnb Cash on Cash Return: 16.11%
- Airbnb Occupancy Rate: 46%
Lebanon
- Median Property Price:$354,900
- Price per Square Foot: $172
- Average Airbnb Income: $2,940
- Airbnb Cash on Cash Return: 5.32%
- Airbnb Occupancy Rate: 63%
When the Airbnb Regulation Is Expected to Go Into Effect
As of today, no new Airbnb rules or short-term rental regulations have been passed by the Toledo City Council. However, whether the newly proposed Airbnb regulations come into effect or not, this should not stop you from investing in Toledo rental properties for all the reasons mentioned above.
This is one of the most important Airbnb tips you will hear. Meanwhile, the major ingredient required will be getting a tool like the Mashvisor Airbnb profit calculator, which provides relevant data to help find profitable investment properties in any location, including Toledo.
Mashvisor takes into account real estate market analysis metrics such as rental income, occupancy rates, Airbnb cash on cash return, cap rate, Airbnb daily rate, and so on to help you make the best investment decision.
To start looking for and analyzing the best Toledo Airbnb rentals or any neighborhood of your choice, click here.