New to Real Estate · Toronto · Member since 2020 · 3 posts · 2 votes
Hi everyone,
I’m exploring short term rentals in Ontario cottage country, within about 2-3 hours from the GTA for my first rental property. There seem to be some deals in 4 season cottages that would be cash positive if rented short term on Air BNB or VRBO. Would be more work but could be worth it for a few years to get into the market.
A very high level example:
600,000 purchase price (or 550 + 50 reno)
20% down (120K)
Mortgage for 480K, 30 yr @ 2.99 = $2016/mo
Let’s say total monthly expenses are $2800
2800 x 12 = 33,600 annual operating expense
150/night x 365 = 54,750 (150 avg, higher in summer, lower in off season)
15% vacancy (8,212.50)
= 46,537.50 - 33,600
= 12,937.50 annual profit or 1000+/month
Who is having success with this? What areas are best for 4 seasons? Can anyone recommend realtors or property management that specialize in short term vacation rentals? Anything I’m missing here??
Really looking forward to hearing from those of you making it work in Ontario’s market.
Interesting thread! Would also love to hear if anyone has made this model work, and at what vacancy rate? How much (%) would you pay a property manager for this model? I imagine a fair bit with the high touch nature of the many transactions. Seem risky, but I like the long term appreciation outlook for lake side property in cottage country anywhere near the GTA.
@Hai Loc thanks for your reply. And I agree, 15% was low. Would you say 30% is more realistic?
Its hard to say
So many variables..
Isn't December 1 to Feb 28th auto 25% vacant? How realistic is 100% occupancy for the remaining 9 months? Also you need to expect to have a bad winter sometime down the road.
You need to do your due diligence in the market you are looking.. check STR sites and look at your competitors..
I just bought a lake cottage in QC near where my fiancé grew up. We mostly want it to pay for itself and hopefully make a small profit until we can retire and use it as a summer retirement home.
As far as income and vacancy projections, a quick internet search uncovered 2 other similar cottages nearby with availability calendars and price rates for the next year. The rental 4 doors down is already booked for 50% of October 2020, every weekend in November, and the 2 week Christmas/New Years holiday. I wouldn’t automatically assume winters will be 100% vacant. There could be winter activities nearby that attract people such as ice fishing, snowmobiling, etc.
I also discovered they had variable rate pricing depending on which dates and if you stay 1 -3 nights or less in the high season, they limit stays to 1 week minimum, Friday to Friday, to minimize turnover costs, etc.