Hello Canadian BP ers,
Does anyone here invest in the Muskoka region of Ontario?
Curious if anyone has land investments there or can speak to their experience with renting, flipping, or investing in cottages in the region. What areas are you familiar with?
tags: Muskoka, Bracebridge, lake, Lake Rosseau, Lake Muskoka, Lake Joseph, cottage, cottage country, Canada, Northern Ontario, Algonquin, Parry Sound, Huntsville, Gravenhurst, Georgian Bay
Adam, I am vaguely interested in BRRRR to vacation rental in cottage country to play the long term appreciation game. I'm interested to see what this thread brings out.
I was interested in this topic as well, hopefully we can gain some insight to this.
I'm wondering if you're able to achieve anything that would cash-flow as oppose to an appreciation/break even cottage play considering the short length of the rental season.
*Or is the only way to achieve this is to provide additional value added activities other than the typical cottage appeal/attractions? This might be mandatory in order to stay competitive and keep vacancy rates low throughout the season.
Hey guys I'm an investor in the area. I was also born and raised in the heart of Muskoka (Bracebridge). So to this date I have 2 rentals and 1 flip under my belt and have a couple friends who have done very well in the short term summer cottage type rentals such as AirBNB. I'll answer any questions you have to the best of my ability.
Muskoka is a very unique market in it's own. It is to my knowledge one of the wealthiest tourist driven towns. We experienced what looked to be an all time high in terms of sales in the real estate industry in 2016. It was a complete buyers market. I took on a renovation project on a single family home this year and sold it off this summer for 5000 more than what an appraiser told me it was worth. There was huge demand this year and not much lasted more than a week on the market if it was priced right.
As for traditional rentals muskoka is a great market because our average family income is around 59,000 per year leaving a large portion of people in that lower income level. Also with the new policy changes with CMHC high ratio mortgages first time home buyers will have a much tougher time buying their first home so the rental pool will increase leaving more people looking to rent.
I currently hold two rentals one in which is an owner occupied rental which I purchased for 200k 7 years ago and it is worth around 275k today and this year I purchased a triplex as well for 250k and as is with no improvements this yields me an 8% return a year which I would say is quite low. This is also the reason I was able to purchase a solid standing triplex for 250k it's income potential is closer to 20-25% return a year.
Everything I have spoken of thus far is not in regards to water properties and cottages. This is where the big money is I have heard if you're willing to fork out more money and accept a higher level of risk. I have a couple friends who have done well with AirBNB. They have been booked up all summer for the last few years and they are clearing more than what you would make on the properties if they were a traditional rental in just 3-4 months. The disadvantages in my opinion are the meeting and greeting and cleaning up after people. there is more management involved and what would happen to your profits if you hired the duty out?
Just wrote a novel. I haven't been active on here in a while so this makes up for it haha. I'd be happy to chat some more with anyone with questions about the area.
Well gentlemen, let’s revisit the topic! How have things shaped up for you in the last 4+ years? Any new insights in investing in the region, or southern side of Georgian bay? (Simcoe/Grey counties)
I've been doing vacation rental property management for my family cottage near Huntsville for about 3 years now. It is doing really well. Summer is 100% occupancy at between $500-750/ night hosting groups of 6 or less. My fam books time for ourselves and we rent when we aren't using it. We could definately pull better rates if my family wasn't in the equation.
I'm looking to get an Air Bnb BRRRR of my own to ramp things up. airdna.com is a good source for market data, rates, seasonal occupancy. They have good data on the Muskoka region. Cross referencing AirDNA data with my property was quite accurate.
The Muskokas isn't as seasonal as you might think. You won't get peak season summer rates but you can still get decent rent. If your cottage is 4 season you'll get groups that come for the snow. Cross country skiing, snowmobiling, snow shoeing in the winter are popular. Christmas, New Year's, Valentine's, Thanksgiving are high demand. People love to come for the fall colours.
If anyone has wholesale deals let me know. Make sure you find a good property manager unless you are prepared for a part time job and being on call to keep the operation going. Be mindful that it's not passive otherwise.
Has anyone done an Air Bnb BRRRR in the Muskokas?
Does anyone know a mortgage broker in the Muskoka area that is good with rental properties and ideally is an investor themselves?
Air BnB in the area can be really lucrative. The issue at the moment is inventory and Lenders are backing away from short term rentals. They want longterm tenants or you will need to look at commercial financing.