Gibsons eliminates short-term rentals
Sunshine Coast, BC real estate update for September 2022
Market Update - September 2022
Short-term rentals eliminated in Gibsons
At the end of July, the Town of Gibsons passed new bylaws that essentially eliminate short-term vacation rentals in town. New rules will come into effect in January of 2023 to regulate the properties that the Town of Gibsons now calls Residential Guest Units (RGA).
The terms “vacation rental” and “Airbnb” are widely used to reference secondary suites or laneway homes in residential neighbourhoods that are rented for days or weeks at a time to tourists. These are usually self-contained suites in residential homes that have their own entrances, kitchens, and bathrooms, in addition to bedrooms and living spaces separate from those of the owner.
In recent years, these short-term rentals have become contentious and communities across North America are restricting, regulating, and banning their use. Frequent concerns are that vacation rentals contribute to a shortage of affordable, long-term rental housing, and that residential neighbourhoods are being disturbed by noisy tourists who use these properties as alternatives to hotels.
Gibsons redefines principal residences
Starting next year, RGAs can only be operated in an owner’s principal residence. At first glance, this appears to be a modest change.
Many homeowners consider their principal residence to be their entire property. If you consider your princial residence to extend from property line to property line and include everything in between, you wouldn’t be alone. However, the Town of Gibsons has its own definition of principal residence.
In Gibsons, your principal residence the specific space in which a person “conducts their daily affairs (including receiving official mail).” This definition means that an owner with a legal secondary suite cannot use that suite as a short-term rental as it’s not part of his/her principal residence. No longer is your home comprised of a house with a secondary suite - it’s now a house with two primary residences.
Permits and fees
The Town of Gibsons requires homeowners to apply for one of a limited number of Temporary Use Permits (TUP) that will allow owners to operate a “non-principal residence RGA” for up to two years, starting in January 2023. There’s a one-time TUP application fee of $1,500 plus an annual business license fee of $2,000. After the initial two-year period, homeowners can apply to have their TUP renewed for a $1,000 fee.
Homeowners can still rent out their entire principal residence for a maximum of 3 consecutive calendar months in a calendar year. Or they can choose to run a partial-unit RGA. In this scenario, owners can rent out as many as two bedrooms in their principal residence year-round, provided they are home during guest stays. Partial-unit RGAs are subject to an application fee of $400 and a yearly licensing fee of $200.
Out-of-market owners may opt to sell
If you own a recreation property in Gibsons and rent out the property when you’re not using it, these changes could affect you. You may be forced to pick from one of the following options:
Apply for a TUP that would allow you to operate a non-principal residence RGA;
Let the home sit empty when you’re not using it, as there’s no vacancy tax on the Sunshine Coast; or
Choose to sell your home and avoid the issue entirely.
If you’re leaning towards Option 3, consider listing sooner rather than later. I expect there’ll be a flood of what were once short-term rentals in the first half of next year when owners suddenly realize the magnitude of the changes being implemented by the Town of Gibsons.
Listen/Watch/Read my full market report
This really only scratches the surface of the changes being implemented by the Town of Gibsons. Watch my full September 2022 Market Report for more details.
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📰 Read the full market report on my website: https://www.truebluerealty.ca/blog/65766/sunshine-coast-bc-real-estate-update-september-2022
How to choose a property manager
If you’re considering buying a revenue property (or you’re switching from short-term to long-term rentals), consider hiring a property manager (PM) to care for your investment.
As their title suggests, property managers manage properties. This means your PM will be the one advertising for tenants, screening applicants, and filling out paperwork like leases and walkthroughs.
How do you separate the good PMs from the bad? You can hit Google and search for property managers or you could ask a Realtor for a referal. Regardless of how you come up with a list of potential PMs, interview each candidate to ensure you’re working with a professional.
Questions to ask a Property Manager
How many units will the PM be responsible for? Ideally you want as few units as possible per manager.
How will the PM decide what to charge for rent? How does he/she know what market rent is?
What’s the tenant screening process? Do they perform reference checks? Credit checks? What kind of documentation is required to apply? Photo ID? Paystubs?
How often do their tenants pay their rent on time? (Correct answer: “Always.”)
How many evictions has the PM filed in the past year? If a PM is doing a good job of screening tenants, this number should be very low.
How do I or my tenant contact you after hours? What’s the process if the tenant has an emergency?
Which contractors do you have existing working relationships with?
Are you a Real Estate Council of BC member? (Correct answer: “Yes.”)
I’d also expect any PM on my short list to provide some references that I can talk to. Asking for a list of 25 might be overkill but a professional PM with a good reputation should happily provide you with the names of at least two or three satisfied clients.
Questions to ask a PM’s references
How hard is it to reach your PM during office hours? How about after hours or during emergencies?
Do you always receive rent when it’s due? If no, why not?
How’s the written documentation? Does the PM provide a detailed monthly report/invoice? Did you receive a copy of all the tenant documentation? Do they provide copies of repair invoices (plumbing, appliance repair, etc)?
How involved were you with tenant screening? How involved are you permitted to be?
Has the PM ever had to evict one of your tenants? If yes, why? If more than once, how often?
Does the PM ever charge for “extras” or is his/her invoice all-inclusive?
Is there a lot of tenant turnover? Is the unit constantly being re-rented every six months?
Is there a lot of PM turn over? How long have you been with the management firm and how often during that time did you get a new PM?
On a scale of 1 to 10, how would you rate this PM? Would you hire this PM again?
Hiring a professional doesn’t absolve you of responsibility; you’re still the one that’s in charge of managing the manager so be proactive and hire the best. A good property manager is a timesaver for investors. A bad one, however, can cost you dearly, both financially and emotionally.
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Call Tony today!
If you’re not already working with an agent, call me when you’re ready to buy or sell and I’ll guide you through the busy and competitive real estate market on BC’s BEAUTIFUL Sunshine Coast.
Tony Browton - TrueBlueRealty.ca
Personal Real Estate Corporation
RE/MAX City Realty (Gibsons)
Email: Click here to email Tony
⚠️ DISCLAIMER: This newsletter and its contents are not intended to cause or induce breach of any existing agency agreement.
There was obviously no serious studies done on such policy decision.
This is going to seriously harm tourism on the coast because there are not near enough hotels or camp grounds here.
This will also hurt restaurants and other local businesses struggling after the past couple years.
Changes could be made to enforcement regarding the occasional disrespectful tourist(but this is honestly very rare)
And anyone thinking this will increase long term renting is kidding themselves. Most who do short term rentals don't actually need the income and will not subject themselves to BC's restrictive rental rules or the frequent risk of serious damage to their property with little recourse.
We had our home long term rented and faced over 40,000.00 in wilful damage that we could not get back because you cannot squeeze water from a stone. We had to move back to the property last year and are still working on repairing the damage. To be clear, after our experience renting long term, we also have no intention of short term renting ourselves.
The road to good intentions is often paved with nice sounding but ill thought policies/intentions.
This is a blatant tax grab, and we will see over time that no good will come from this, & rents will actually go up because of the further reduction in supply. The reality is that even short term supply affects long term rentals.
Did anyone conduct a study of the likely impacts on the rental market, their target benefit? Or on the economy? Is there a set of cost benefit assumptions anywhere to be found?