How to Grow a Vacation Rental Business

A short-term rental business can be expanded by means of three interrelated factors: by adding properties (either by owning them, by co-hosting, or by means of management contracts), by increasing the revenue from each property (through higher pricing and by taking in bookings directly), and by reducing the amount of time each property takes from you (by using systems and hiring staff). In Canada, a fourth element has now been added to these three: regulatory compliance, which has become the main limitation on how quickly and where you can grow.

This guide assumes you’ve already decided short-term is the right model for your property; if you haven’t, our breakdown of short-term vs. long-term rental walks through the income, effort, and tax differences first.

In 2024, the vacation rental market in Canada is estimated to generate US$1.88 billion in revenue and is projected to reach US$2.12 billion by 2029. This growth is happening within a regulatory framework that is very different from the one that existed three years ago. In the past 18 months, British Columbia, Quebec, and Alberta have each passed or amended legislation, and each change affects how a rental business can grow. This guide examines growth models, the regulations you must meet before adding a single property, and the operational systems that let your portfolio scale without requiring you to respond to every guest message at 2 a.m.

Why Growing a Vacation Rental Business in Canada Requires a New Playbook

The advice that worked in 2019, namely, to buy in a tourist area, advertise everywhere, and increase prices in the summer, no longer works. Three changes have altered the situation.

Initially, provincial governments began passing laws directly related to STRs rather than leaving the matter to municipalities. The Short-Term Rental Accommodations Act in British Columbia, which became effective on May 1, 2024, limits short-term rentals to the host’s principal residence in most areas with a population exceeding 10,000. This rule immediately ended the “buy a second property and Airbnb it” approach in most of the province’s major markets.

Secondly, since the 2023 fire in an illegal Airbnb in Montreal, which resulted in seven deaths, Quebec has been vigorously enforcing its tourist accommodation law. In 2024 alone, the tourism certification body (CITQ) carried out more than 3,200 inspections and handed down 847 fines, which is nearly three times the number of fines given in 2022. Compliance is no longer optional or ignored quietly.

Third, the federal government has taken steps to tighten tax regulations. As of January 1, 2024, Section 67.7 of the Income Tax Act makes it impossible to claim expense deductions for short-term rentals that fail to comply with the provincial or municipal laws under which they operate. Simply put, if a property is not licensed, it is not only liable to receive a fine but also has your entire deduction for mortgage interest, utilities, and maintenance for that year cancelled.

In this situation, your decision-making has to differ from the advice in a US-oriented guide. Regulatory fit must come first, and all other aspects- pricing, automation, the team, and direct bookings- must be built on a legally permissible foundation.

Choose the Right Growth Model: Ownership, Co-Hosting, or Management Company

Most new operators choose to buy more property, since that approach is always mentioned. However, it is also the slowest and most capital-intensive method, and in several Canadian markets, it is no longer legally permissible to invest in property using this method.

Direct ownership still works best in markets without a principal residence restriction. Calgary is the clearest example: unlike Toronto, Mississauga, and most GTA cities, which restrict Airbnb to a host’s principal residence, Calgary permits short-term rentals in both primary and non-primary residences. If you have capital and want full control over the asset and the guest experience, ownership in a market like Calgary, Red Deer, or parts of interior BC still makes sense.

Co-hosting lets you operate someone else’s property for a revenue split, usually 15 to 25 percent of booking revenue, without tying up your own capital. This is the fastest way to add units in a principal-residence-restricted market, because you’re managing on behalf of an owner who already meets the residency requirement. It also scales your income without scaling your mortgage exposure, though it caps your upside since you never own the asset.

The management company structure is the model for operators who want to run 10, 20, or 50 units without owning most of them. You charge a management fee (typically 20 to 30 percent of gross revenue in the Canadian market) and take on the operational load: pricing, guest communication, cleaning coordination, compliance filing. This is where most of the serious growth in Canada is actually happening right now because it sidesteps the principal residence problem entirely. You’re not the resident. The homeowner is, and you’re managing on their behalf.

My honest read: if you’re starting from zero capital and a regulated market, co-hosting first, then converting your best relationships into management contracts, beats trying to buy your way into a portfolio. Ownership only wins if you’re in a market like Calgary or a small BC municipality under the 10,000-population threshold, where investment properties are still permitted outright.

Navigate Canadian STR Regulations Before You Scale (Province-by-Province)

British Columbia.

The Short-Term Rental Accommodations Act limits STRs under 90 nights to a host’s principal residence plus one secondary suite or accessory dwelling unit, in any community over 10,000 people (plus some smaller adjacent communities). As of November 2025, the requirement applies in more than 77 BC communities, including Vancouver, Victoria, Kelowna, and Squamish. In addition, every host must display a provincial registration number on all listings, with annual fees of $100 for a rental in a residence the host lives in or $450 for a non-owner-occupied secondary suite. Penalties for violating the Act can reach $3,000 per day, per infraction. A handful of markets remain exempt, including Whistler, Tofino, and communities below the population threshold, which is exactly why geographic selection matters more in BC than in almost anywhere else in the country.

Quebec.

Every paid short-term rental needs a CITQ (Corporation de l’industrie touristique du Québec) classification certificate, regardless of whether you rent your primary residence or an investment property. Fines range from $2,500 to $100,000, and Montreal has tightened further, restricting most zones to primary-residence rentals only and adding per-night penalties for non-compliant operators. Quebec also charges a 3.5 percent lodging tax on top of provincial and federal sales taxes, which is collected by the operator and remitted to Revenu Québec.

Alberta.

Calgary took a different path than BC and Quebec. Amendments approved by City Council in December 2024 took effect April 1, 2025, replacing the old room-count licensing system with a primary/non-primary residence model, and removing the requirement for condo board consent on new applications. A licence for a non-primary residence runs $510 a year versus $172 for a primary residence, and the city has approved (but not yet triggered) a moratorium on new non-primary licences if the purpose-built rental vacancy rate drops below 2.5 percent. Investment properties remain permitted, which is the main reason Calgary is treated as a more scalable Canadian market than Vancouver or Toronto.

Ontario.

Most GTA municipalities, including Toronto, restrict STRs to a host’s principal residence, mirroring BC’s approach rather than Calgary’s. Rules vary meaningfully by city, so check your specific municipality’s bylaw before assuming a property qualifies.

The tax layer, everywhere.

Once your short-term rental income exceeds $30,000 across any four consecutive calendar quarters, you must register for GST/HST and start collecting and remitting it yourself. Below that threshold, platforms like Airbnb typically collect and remit on your behalf, though you lose the ability to claim input tax credits. Selling a property matters too: CRA guidance treats a property as a taxable, hotel-like supply if more than 90 percent of its rental activity has been short-term stays under 60 days, which can mean charging GST/HST on the full sale price rather than treating the sale as an exempt residential transaction. That’s a five- or six-figure difference on a typical property sale, and it’s worth a conversation with an accountant before you list an STR-heavy property for sale, not after.

This doesn’t mean Canadian STR growth has come to a halt; it means the growth strategy is now based on a map showing where each rule applies, rather than on identifying the market with the best cap rate.

Systemize Operations with SOPs, Automation, and a Property Management System

One property functions well in terms of memory and with a shared calendar, but five properties do not. The difference between operators who reach a plateau at two or three units and those who can go beyond ten almost always lies in whether they set up their systems before they needed them or after they had burned out.

Start with a property management system (PMS) that synchronizes your calendar, pricing, and guest messaging across all the platforms where you list. Otherwise, double bookings will become a question of when, rather than if, the moment you manage more than two or three properties across several channels. If you have a channel manager linked to your PMS, availability will stay accurate on Airbnb, Vrbo, and Booking.com in real time.

For tasks you repeat, such as:

turnover cleaning checklist
guest communication templates for check-in and common problems
maintenance escalation procedures
and a list for restocking consumables

create standard operating procedures. Documents like these may seem like an unnecessary burden when you are running a single property; yet they allow a new property manager or cleaner to get up to speed and become productive within a week rather than a month.

Do the things that do not require a human decision yourself, such as:

providing check-in instructions
asking for reviews
sending out pre-arrival messages
and issuing smart lock codes

while setting aside your own attention or that of your team for the situations where it is actually needed: such as a guest complaint, a maintenance emergency, or a pricing decision during a week with low occupancy.

Master Dynamic Pricing and Revenue Management to Maximize Each Property

Charging a fixed amount each night results in missed revenue on high-demand nights and low occupancy on slow nights. Dynamic pricing tools adjust rates based on local demand indicators such as nearby events, seasonal trends, day-of-week patterns, and how competitors price similar units.

Many new operators make the mistake of not taking dynamic pricing into account; instead, they set up the tool and then leave it alone. Pricing software provides an initial recommendation, not a final decision. You should check it every week, particularly as the shoulder seasons approach, since algorithmic tools tend to underprice during sudden spikes in local demand—such as during a festival, a conference, or a wildfire evacuation—events that aren’t captured by historical data.

Occupancy rate and average daily rate tend to move in opposite directions. If you’re aiming for 95 percent occupancy, this generally indicates that your rate is too low. When you’re trying to maintain a high rate but have only 40 percent occupancy, it means you’re pricing for a market that you’re not actually operating in. In Canadian mountain and lake areas, the properties that achieve the best results maintain occupancy rates between 60 and 75 percent and set rates to take advantage of the premium these markets command during peak weeks, rather than prioritizing bookings at all costs.

Build Direct Bookings and Reduce Your Dependence on OTA Commissions

Airbnb and Vrbo impose host fees, generally in the range of 3 to 5 percent, in addition to guest-side service fees, which raise total platform costs considerably when you account for the entire transaction. This is the price one pays in order to gain access to their customer base. The arrangement is reasonable for a single property but becomes a serious burden on profits when you manage a portfolio and have to pay that percentage on each booking every month.

By offering a direct booking website, you enable guests who have stayed with you before, as well as those who discover you through search or social media, to book without paying a commission to a booking platform. Although you still need listings on the OTAs to be found by first-time guests, the aim is to get satisfied guests to book directly with you on their second or third visit. A straightforward email sent after a stay, including a discount code for direct booking next time, lets you secure a significant portion of repeat business without paid advertising.

It is most effective when the operator already has a track record—that is, enough reviews and enough returning guests for the direct website to convert into bookings. When you are managing your first property, you should prioritize OTA visibility and collecting reviews. Only after you have a guest base can direct bookings become a real source of revenue.

Expand Your Portfolio Strategically: Mid-Term Rentals as a Regulatory Hedge

A growth opportunity which most Canadian operators have not included in their current plans is mid-term rentals, since stays lasting between 30 and 90 days fall into a separate regulatory category from those of short-term rentals in a number of provinces, and it’s important to understand that gap before you conclude that your only choices are “STR” or “long-term lease.”

The requirement that applies to the principal residence in the case of rentals lasting fewer than 90 consecutive nights does not extend to furnished rentals that are booked for 90 days or more, since such rentals are completely outside the definition of short-term rentals under the Act; this means that a property which is not owner-occupied and which cannot legally operate as a nightly Airbnb in a restricted municipality in British Columbia may still function as a furnished monthly rental for travelling nurses, professionals who are relocating, or tenants who have been displaced by insurance claims.

Calgary took the opposite course. The amendments of April 2025 widened the definition of short-term rentals in Calgary to include stays of up to 180 consecutive days, with the aim of bringing the furnished mid-term rental market for travelling nurses, contractors, and those involved in corporate relocations into line with the regulatory framework—the market had previously been left in a regulatory gap. As a result, in Alberta, a furnished rental for 60 days now requires the same business licence as a weekend Airbnb, whereas in British Columbia, a stay of the same length can avoid the principal residence rule.

The point isn’t that mid-term rentals constitute a loophole; rather, it is due to the fact that regulatory definitions differ from province to province that an identical operational approach—furnished stays lasting one to three months—can amount to a compliance workaround in one province and at the same time be a fully regulated category in another. Before considering mid-term rentals as part of your expansion strategy, you should check the exact definition and licensing requirements in the municipality you intend to enter, since the term “30 to 90 days” has a different meaning in Kelowna than it does in Calgary.

Hire, Delegate, and Build the Team That Lets You Scale Without Burnout

The maximum number of properties that each operator I’ve observed reaches is three to five, and in all cases they still handle every guest message, every call for cleaner coordination, and every pricing check themselves; that limit is one they have set for themselves, not one imposed by the market.

The first person hired usually takes charge of cleaning and coordinating tenant turnover, since this is the most time-consuming ongoing task and can be delegated most easily with a clear checklist. The second hire generally handles guest communication when you are not available, either a virtual assistant who replies to messages overnight or a local co-host who can handle on-site issues.

Delegation only makes sense if the systems mentioned earlier in this guide are already in place; if you give an unwritten procedure to a new employee, you simply transfer the chaos from yourself to them. You should draft the SOP first, then hire based on it, and build redundancy into the arrangement, since whenever a single cleaner or co-host is unavailable during a handover, they become a single point of failure.

At most of its five or more properties, Canadian property operators either hire a specialist property manager or adopt a hybrid approach, maintaining control over pricing and relationships with owners while signing a local management company to handle day-to-day operations in markets where they are not physically present. Neither of these methods is superior. The right model depends on whether you’re building a business you intend to run yourself for many years or one you plan to sell or transfer later.

Frequently Asked Questions

How do I get more bookings for my vacation rental?

Start with the photos and description of your listing, since this is the aspect you can control most directly. In addition, dynamic pricing helps keep your prices competitive during both high- and low-demand periods, and responding quickly to booking enquiries measurably improves conversion across all major platforms. Reviews build up over time: the first 10 bookings are particularly important, as they establish the foundation for subsequent reviews.

How many properties do you need to make a vacation rental business profitable?

There is no definitive figure, since profitability depends more on your cost structure per property than on the number of units. One well-managed property in a good market can outperform three poorly managed properties. On the other hand, most operators find that the economics of employing dedicated staff, such as a cleaner, a co-host, and a PMS subscription, begin to add up once they have three to five properties, as the fixed costs of these systems are then spread over more revenue.

Do I need a business licence to run a vacation rental in Canada?

In most municipalities in Canada, that is the case. In cities such as Calgary, Toronto, Vancouver, and most mid-sized cities, you must obtain a business licence for short-term rentals in addition to any provincial registration (for example, BC’s provincial number or Quebec’s CITQ certificate). Since requirements and fees differ from city to city, check the bylaws of the specific municipality rather than assuming a licence obtained in one Canadian city will be valid in another.

What is the best way to manage multiple vacation rental properties?

The property management system that brings your calendar, pricing, and guest messaging together on all platforms should form the basis of your operation. Among other things, those operators who are able to grow successfully are the ones who draw up standard operating procedures before they make hiring decisions, not after, and who appoint someone to handle staff turnover and another to take charge of guest communication as their very first two hires, rather than attempting to carry out every task themselves.

If you’re going to set up a vacation rental business in Canada today, you have to focus on compliance rather than on optimization. The people who are succeeding don’t have to be those with the most capital; instead, they are the ones who have beforehand worked out their regulatory requirements, have established systems which don’t rely on their own being available, and have regarded mid-term rentals and management contracts as real ways of achieving growth rather than as secondary considerations.

If you would like a second opinion on whether your particular expansion plan meets the regulatory threshold in your destination market, book a consultation with Nomadics, and we will go through it province by province.

Sources

Why Growing a Vacation Rental Business in Canada Requires a New Playbook

Choose the Right Growth Model: Ownership, Co-Hosting, or Management Company