What Stigma? There’s No Longer Shame In Renting Out Your Muskoka Cottage

Once upon a time, renting out your Muskoka cottage came with an accompanying stigma. But times have changed. Ontario’s cottage country – including the coveted Muskoka region, with its multi-million-dollar “cottages” – has seen more owners rent out their breezy lakefront properties as of late.

According to the latest District of Muskoka Second Home Study, a growing number of Muskoka cottagers are renting out their cottages. The study revealed that 11% of owners of second homes in Muskoka are renting their properties for at least part of the season. This figure has increased from 7.3% in 2017, and just 3% in 2013, with an average rental period of 7.7 weeks per year in 2023.

“We’re seeing dramatically more people rent out their cottages than in the past,” confirms Maryrose Coleman, a busy cottage country Realtor who also helms Muskoka District Rentals, a company that facilitates luxury cottage rentals in Ontario’s most coveted cottage country. “The word is that there are some 60% more cottages for rent in the Muskoka area than there were three years ago,” she continues.

Coleman says it’s now rare for a cottage purchaser to buy a cottage without inquiring first about its rental income potential and rental success rate.

The Stigma Has Subsided

Especially in the elite Muskoka region – in particular, on the three big lakes (Rosseau, Joseph, and Muskoka) – renting out your vacation property used to be met with raised eyebrows from fellow cottage owners. But in the past few years, that’s stopped being the case.

“There used to be a stigma in renting out your cottage,” says Coleman. “Now, it just makes good business sense to rent out your property in order to offset some of the expenses of your cottage, at the very least. We saw this start to shift pre-COVID, and it really picked up traction during the pandemic.”

Undoubtedly, the rise in popularity of rental sites like Airbnb and VRBO – which feature no shortage of uber-luxury properties – also contributed to this. But the pandemic, says Coleman, was a major catalyst.

An Oversaturated Market and Dwindling Demand

During the pandemic, the demand for cottages – both to purchase and to rent – shot through the roof in Muskoka, and pretty much everywhere else in the country. Unable to put their passports to use, countless cooped-up Canadians turned closer to home for summertime getaways.

During these summers, it was pretty near impossible to rent a piece of Muskoka’s waterfront real estate without booking months – and months – in advance and dropping some serious cash to do so. In fact, the cottage country rental market was in almost a frenzied state for a while there. But now, supply is up and demand is down. Subsequently, the rental prices have dropped.

“We saw this recent drop in prices anyway because we had a crazy run-up during COVID,” says Coleman. “Demand started to ease up when travel became a possibility for more people again. Obviously, when demand shifts and there’s an over-saturation in the market, prices are going to drop. But it’s really been dramatic this year.”

Coleman says that last year, she noticed more properties on Muskoka’s rental market. “This year, there’s even more properties on the market and less demand,” she says.

The Income Potential

For cottage purchasers, a climate of sky-high interest rates makes cottage rental an enticing way to offset some of the mortgage costs, along with basic operating expenses. Cottages in Muskoka can rent for thousands (many thousands, in some cases) of dollars a week in the summer months.

Coleman, however, cautions about having too high of hopes or reliance on rental income. “There’s a belief that if you buy a cottage – borrowing to do so – that it will carry itself,” says Coleman. “But nobody is making $10K a month in the winter on rental properties in cottage country. We’ve had people last year and this year who had this expectation, and now they’re forced to sell.”

The reality is that there won’t be a lineup of guests rushing to book a lakefront property in the dark depths of a Canadian winter. There’s ski country for that.

Tech Has Both Helped and Hurt

Tech has made it easier to rent out your cottage – in everything from vacation home rental websites and virtual property tours, to smart door locks. Things like social media and LinkedIn also make it easier to vet potential renters compared to a few decades back.

But tech has also made the vacation home rental game riskier. “There’s an awful lot of fraud on the internet,” says Coleman. “You get people who are falsely advertising properties. So, every year we get someone reaching out to us to ask whether they actually rented a cottage from us and we’re like, ‘No, sorry.’ They rented it on Facebook Marketplace, paid cash for it, and they’re out of luck. The worst case – and we’ve seen this happen – they show up to the cottage with a car full of groceries and luggage and the cottage isn’t rented to them and there’s nothing they can do.”

Coleman says there are few protections in place when it comes to this type of fraud. “It’s very difficult to get a false listing taken down,” says Coleman. “It took a week for a friend’s false listing to be taken down – and people had already paid money to rent the property.”

Advice for Cottage Owners

There are three ways you can rent out your cottage: you can do it yourself and rent to friends; advertise it on platforms like Airbnb or local rental websites, or use a company like Muskoka District Rentals, which basically takes care of everything.

“We create a beautiful listing to attract guests, we vet the guests, we look after the paperwork, we look after them on-site, and we take care of cleaning and maintenance as needed,” says Coleman. “This is the most hands-off approach for cottage owners.”

Naturally, prices vary depending on the option you chose. According to Coleman, it will cost about 15-20% to rent out the cottage on your own, 15-20% to use a booking agency, 25-35% to use a full-service agency.

When it comes to advice to cottage owners looking to rent out their properties, Coleman says that – first and foremost – they need to know if they need a licence in their jurisdiction to do so. “If they do, they need that licence in place before the rentals,” says Coleman. “They also need to make sure their insurance company knows that they’re renting; their insurance could be invalid if they don’t notify them.”

Finally, cottage owners should prepare the property as though they were the guests themselves. “They should anticipate what guests would like to find at the property,” says Coleman. Like many things in life, the devil is in the details – from quality hand soaps, to top-of-the-line coffee makers and reliable Wi-Fi.

A Temporary Piece of Ontario’s Paradise

Of course, the oversaturated cottage country rental market and more relaxed prices are good news for those in search of a temporary piece of Muskoka.

Coleman says that most of her cottage-renting clients want to be close to Port Carling or Port Sandfield. “That’s where the activity is, with great restaurants, shops, and grocery options,” says Coleman. “So, that’s where we see the bulk of the demand. People want to be within 15 minutes of Port Carling. We sometimes get the odd outlier who wants the opposite – peace, quiet, and nature. In that case, we’ll direct them to upper Lake Rosseau, Lake Joe, or a smaller lake, where it’s quieter.”

Coleman advises renters to carefully vet who they’re renting from and do their thorough research before packing up the car and heading north. “You want to understand the property and where you’re going,” she says.

For those in the market to rent a picture-perfect property in Muskoka this summer, there are still rentals available. “We actually have quite a few people looking last-minute this year, which is rare,” says Coleman. “Usually, we’re sold out. But we do have vacancies, and so do others. There are some great opportunities.”