October 4th 2019
Ontario Airbnb Vacation Market
Ontario’s Airbnb Vacation Market
Ontario’s cottage country and vacation home markets are popular weekend getaway destinations. Whether it’s Grand Bend, Bayfield, Port Stanley, Prince Edward County, Muskoka, the Kawarthas or elsewhere, it stands to reason that there are thriving short-term rental markets out there. Whether you’re looking to offset the costs of owning a second home, build equity in your future retirement dream place or are simply looking to invest in a more cash-flow positive investment property, the Airbnb market offers some amazing opportunities.
If you’re a part-time Airbnb host, you can expect to offset most (if not all) of your basic costs, and full-time hosts are almost always cash positive (sometimes to the tune of $500 or $1000 or more a month).
Search Here For Potential Homes to Purchase & Rent
Grand Bend - https://www.gangbar.ca/mls
Bayfield - https://www.gangbar.ca/mls
Port Stanley - https://www.gangbar.ca/mls
What to Expect When You Start an Airbnb
The Ontario Cottage Rental Season
The rental season in most of Ontario’s cottage areas traditionally runs from May to September, though some locations see strong Airbnb demand throughout the year, depending on the type of accommodation and where the Airbnb is located.
Ontario Cottage Airbnb Rental Rates
Rental rates for short-term accommodations vary greatly and depend on location, size, condition, style, features, reviews and marketing. Bigger properties and those with more bedrooms rent on Airbnb for more money. As of writing (September 2019), Airbnb estimates monthly income for a home that sleeps 6 people (assuming a 50% vacancy rate) as follows:
Grand Bend – $3,736/month
Bayfield – $3682/month
Port Stanley – $2716/month
Bancroft – $2,832/month
Cobourg – $3,467/month
Haliburton – $3,590/month
Huntsville – $2,711/month
Kawartha Lakes – $2,094/month
Manitoulin Island – $3,385/month
Muskoka – $3,709/month
Niagara-on-the-Lake – $4,262/month (Note: most of the Niagara area does not allow short-term rentals)
Port Dover – $2,404/month
Prince Edward County – $3,228/month
Wasaga Beach – $2,857/month
Individual incomes vary significantly.
Airbnb Vacancy Rates
While vacancy rates depend on a lot of factors (location, weather and seasonality, your marketing activities and photos, reviews, etc.), you can conservatively expect to book out your home or cottage 30% of the time.
Short-Term Rental Regulations
The proliferation of Airbnbs in Ontario’s cottage country areas has impacted communities and the price of housing, in both positive and negative ways. Many areas (including Grand Bend, Bayfield and Port Stanley) are in the process of instituting rules to regulate the short-term/Airbnb market. For example, Prince Edward County has passed bylaws requiring licensing in 2020 and grandfathering current Airbnb rentals while restricting new ones.
Make sure to talk to a local REALTOR to understand the implications before you buy a property.
Setting The Price of Your Airbnb
The easiest way to find out how much you can rent your property for is by looking at similar properties in similar areas with similar features, on popular websites. Your local agent can likely guide you as well. Prices vary a lot depending on what season it is and of course, holidays and big festivals. A few other tips to keep in mind:
- If you list with Airbnb, they have a feature where they can set the price for your property, depending on all the data they’ve accumulated about seasonality and the other area properties. I’ve seen their recommendations range from $275 to $650 a night for the same property.
- Most people charge a cleaning fee on top of the regular per night fee. It helps your property look cheaper and protects your margin. And don’t underestimate how much cleaning will cost.
- A lot of people offer discounts for longer stays or repeat guests. Longer stays mean less cleaning costs and check-in/check-out hassles, and repeat guests offer peace of mind.
- Expect that some people will try to negotiate your rate. You don’t want to look so expensive that everybody clicks by, but you don’t want to be so cheap that you can’t afford to negotiate and make people feel like they got a deal.
Managing Airbnb Bookings/Deposits
Some best practices for managing bookings:
- Respond quickly to booking requests – People using Airbnb, vrbo, etc. often email multiple people at the same time. Quick response time will increase your booking rate.
- Consider having a standard check-in date – that’ll eliminate the ‘orphan’ days that often happen between bookings. If you’re more likely to only rent on the weekends, make sure you have a weekend rate and a minimum booking (e.g., 2 or 3 nights).
- Always use a contract! Airbnb lets you upload your own terms, and the other sites allow you to communicate directly with the guest.
- You’ll always want to consider deposits, cancellation fees, payment timeframes, and transaction fees (if you’re using Paypal). Airbnb certainly has the smoothest method to collect deposits, rent and deal with cancellations, but of course, you lose some control.
Maintaining Your Airbnb Short-Term Rental
Don’t underestimate the benefits of having some reliable local help to assist in property maintenance. You’ll need:
- At least two reliable cleaners or cleaning companies who can work on short turnaround times and evenings/weekends
- Gardener/grass cutter
- Handyman
- Water treatment company
- Propane supplier if your home is heated with propane
- Other trades you may occasionally need: a plumber, electrician, roofing guy, septic tank cleaners and heating/cooling specialists, pool & hot tub maintenance companies, snow removal/plowing.
Risks Of Airbnb-ing Your Cottage
Like every profitable investment, the Airbnb rental market is not without risks. You may encounter problems finding affordable insurance, issues getting financing, bad guests, damage and theft, lower than expected nightly rates and higher-than-expected vacancy. You’ll likely get frustrated at some point by the amount of time you spend managing it (or paying others to do it – and of course dealing with all the usual cottage maintenance items. The biggest risk of all is changing local regulations that impact your ability to rent short-term at all.
If you’re thinking of starting an Airbnb at your cottage or vacation home, make sure to educate yourself, balance the risk and partner with a Realtor who understands the unique aspects of this marketplace. If I'm not familiar with a particular market, I’d be happy to connect you with a local expert in your chosen area.