Vacation Rentals 101: Why You Should Rent Out Your Cottage
January 13, 2012
The demand for cottage rentals is on the rise. What does this mean for current cottage owners? Your cottage could be a cash cow.It was recently reported that demand for cottages is on the up and up among domestic and international audiences (one figure suggests that the demand for Canadian cottages is nearly four times greater than the supply). One reason demand is rising is that the baby boomer generation is on the brink of retirement, meaning there is an entire Canadian cohort bound for cottage country. Then, there is the demand generated by publications like National Geographic and the New York Times, which have put Muskoka in an international limelight. It is crystal clear that countless Canadians want to realize the cottage dream while the rest of the world wants to get this great Canadian past time on their calendar as well.
This market reality has implications for cottage goers, with the simplest rules of supply and demand dictating a hike in property prices. It should come as no surprise that buying a cottage costs the prettiest of all pennies, with cottage property prices having risen 30-40% between 2008 and 2011. Yet, as property prices rose the economy receded, and the pool of potential buyers has largely become a reservoir of promising renters. What does this mean for current cottage owners in an uncertain economy? A few things.
For cottage owners who have thought about selling, you may want to think twice. Why sell when you can rent? With this sort of rental demand, your cottage could be a cash cow. Renting out your cottage may provide you with the extra income you need to confront financial constraints, while allowing you to hang on to your cottage as it continues to appreciate in value - as demand continues to grow so will the market price of your property. There is a world of potential renters out there who can supply you with a stream of rental revenue, which can be a solid supplement to your annual income and a big help in covering the costs of owning a cottage, such as mortgage payments, property taxes, and infrastructure maintenance.
The traditional means of renting out a property range from classified ads to commissioned agents, but the online rental by owner model provides a more modern and proprietary way for property owners to find renters. CanadaStays.com is one such channel that empowers cottage owners to take the rental process into their own hands by supplying owners with a custom webpage for their property and giving them all the tools and support they need to market, manage and make money from their rental. By using CanadaStays.com, cottage owners connect directly with travelers, retaining a larger share of rental income (i.e., holding on to the chunk of revenue that would otherwise constitute an agent's commission dollars) and enjoying security and support that is missing from free advertising platforms, such as classified sites.
Vacation rental by owner websites have been hugely successful in the context of condos and apartments, and the results for cottage properties have proven to be just as profitable. Take these numbers for example:
- Basic Listing with CanadaStays.com = $199.00 + tax
- Average Weekly Rental Income = $1,000.00
- Average Seasonal Income (16 weeks) = $16,000.00
- Return on Investment = over 80X your initial investment
Keep in mind these numbers are a ballpark figure, with many properties renting for above $1,000.00 per week and well over 16 weeks per year. The take home message: the online rental by owner model provides property owners with enormous income potential for a low initial investment. Further, CanadaStays.com does not collect commissions on bookings and provides extensive marketing and management support, ensuring that property owners get the biggest bang for every buck.
With CanadaStays.com, cottage owners can't afford not to rent out their property...