Renting Out Your Cottage On AirBnB

By Joe Callaghan • Last Updated July 12 2022

Short-term rentals didn’t begin in 2008 but it can kinda feel that way.

There was a world of home-from-home vacation catalogs, house-swap associations and so much more that preceded the arrival of, to give it its birth name. Yet in the years since AirBnB has reached near anthimeria territory (when a brand becomes so all-consuming that it becomes the practice itself. See: Hoover, Velcro, Tupperware.)  

There are competitors large and small to AirBnB in the market. From VRBO to HomeToGo to local options, there’s no doubt that by exploding the popularity of short-term rentals AirBnB changed the game. In the process they changed the outlook for prospective cottage owners, too. But while the financial benefits are clear, there’s a whole lot to consider before you go down the route of opening your cottage to the world.

Why AirBnBing your cottage rules….and why it may not

Why it rules

🏠 Owning a cottage becomes more financially feasible.
💵 Revenue stream that monetizes your ‘away time.’
🌲 Sharing the magic/beauty of your space with others.
📸 You’re going to have great pics of your cottage.
😃 It’s a brand-new business, which is fun.

Why it does NOT rule

🚗 Impromptu trips to your own cottage might be limited.
🖼️ To succeed, you must depersonalize your own space.
🤬 It may piss off the neighbours.
🤕 No getting away from that higher insurance.
😥 It’s a brand-new business, which is stressful/demanding.

What you need to know

  • The money is there: Being a part-time host is a hell of a lot of work. From building up a compelling, attention-grabbing listing with all the features the discerning renter wants to the logistics of cleaning, replying to booking enquiries and renters’ issues, it’s time-consuming. But the payoffs are there. Even as a part-time host, you can expect to cover mortgage and perhaps upkeep costs and depending on the location and your listing’s popularity even turn a profit very quickly.
  • It’s not as simple as it looks: Making a booking on AirBnB is a breeze. One payment and it’s done. It’s not quite as easy on the other side of that transaction. Among the financial considerations, note that you can’t harness potential rental income to help with financing the purchase. Rental revenue will also be taxed as income in your tax return but almost all the costs associated with it (maintenance, advertising etc.) are deductible. Consult your accountant on other tax implications.

Also keep in mind: insurance premiums are going to be higher but that’s a very necessary negative. (AirBnB and other providers offer extra insurance packages of their own too.) 

  • Location is (still) everything: In earlier chapters we discussed weighing up location factors but that comes into even sharper focus if you’re planning for short-term rental. Some locations can be a logistical or even legal minefield for the market (see below!). In others, the oldest cliches ring true: life is better by the lake. Waterfront access is a huge allure for renters, particularly in the hotspots. On the flip side, if you want to hire a maintenance, cleaning or management firm to help, a remote location may prove a step too far for them. 

What the smart money says:

Don’t scrimp on the pics: It’s impossible to overstate how important photography is to the success of your short-term rental journey. For the sake of a few hundred dollars, seek out a professional with a portfolio that matches what works. Get them to take tonnes and use leftover soft-focus captures on Instagram as you build the profile of your cottage on social media. 

What you need to add to your vocabulary

Responsible rental: Call it a whole other kind of R&R. But it’s also a phrase that has peppered headlines in cottage communities across Canada as the issue of short-term rentals has proved a lightning rod. Just peruse the Responsible Rental section of the Federation of Ontario Cottagers’ Associations website and look at the boatload of recent news reports on the debate. The umbrella organisation for upwards of 500+ associations across the province is all over the issue as many municipalities wrestle with regulating STRs, in some cases banning them outright. While it seems few of the popular cottage and vacation regions in Ontario — and indeed Canada — haven’t seen at least some pushback against the practice, some places are hotspots for friction. Forewarned is forearmed so research how the issue has been playing out in your target destinations and whether crackdowns are on the horizon. A local realtor will certainly be well aware of the current climate. And the sage advice of checking in with your potential neighbours beforehand will certainly apply here, too. 

What you (maybe) don’t know

  • The competition: How to tell if your possible new neighbours are also potential rental rivals? You could always just knock on the door and ask! Alternatively do a map search of the area on AirBnB, VRBO or a local platform. This is also the best way to help you budget and eventually set your price. (AirBnB actually have a feature where they can crunch their data and set your rate for you although renters have said it often varies wildly.)
  • What will be a difference maker: There are books out there on all the tiny touches that can make you a Marvel-level Super host. But even at a macro level, amenities matter. We’ve already mentioned water access, but a hot tub or sauna can really sway a would-be renter too. The decor and design is obviously vital too but if you’re going to rent out often then you’re going to want to avoid all-white everything (or else stump up the cleaning costs). Be stylish but smart with furnishings. And remember that basics are essential too: easy access parking and rock solid reliable wifi.  
  • It’s still going to be empty a lot: It can surprise newcomers but even successful short-term rentals can be empty more often than they’re full. Vacancy rates of 60-70% are very common but offering deals for longer-term bookings can help here. The seasonality of a lot of Canada’s cottage/chalet regions needs to be remembered too. The waterfront playground locations really have to maximise the May-October window.