The Pitfalls and Benefits of Renting Out Your Cottage on Airbnb
Since 2008, Airbnb has been helping users find or host short-term home, room, and cottage rentals around the world. The service currently lists millions of properties in nearly 200 countries, operating more than a dozen offices all around the world. Renting out your Muskoka cottage can present opportunities for earning extra supplementary income, but comes with its own unique drawbacks and pitfalls that you may want to consider before publishing your listing.
Extra income: the only “pro” to being an Airbnb host
The biggest – and only – advantage to owning a rental property is the amount of supplementary income you can earn. This is undoubtedly the main motivator in listing your property on a service like Airbnb, or hosting any long or short term tenant. This extra income can go a long way in helping you pay for mortgage and insurance expenses, or for paying for much needed improvements and repairs to your cottage. Depending on the success of your listing and the frequency of rentals, the extra income earned can greatly improve your quality of life, helping you pay off your mortgage or add new additions to the cottage.
Your time is valuable, make sure you can commit
The first major drawback to listing your cottage on a service like Airbnb is that it can very quickly start to eat up a great deal of your free time. The online nature of Airbnb means that you’ll have to be checking in frequently to respond to inquiries, as well as messaging back and forth with guests about details like arrival information and other important details.
Should your guests experience issues during their stay at the cottage, you’ll need to be on-hand or have someone lined up to solve them in a timely matter, or else be faced with a negative guest review. Another time-consuming aspect is that you may feel it’s necessary to be around the cottage when guests arrive, which can very quickly become disruptive and erratic. This can, however, be eliminated by installing a keypad for entry. You’ll also have to check the property after the guests have left in order to conduct a quick clean-up and inspection, which can take up a good deal of time if you host guests on a regular basis.
While cleaning services can be hired to do this, they are often few and far between in Muskoka and booked in advance; they aren’t available on a moment’s notice like they are in the city. If you can find one that can regularly clean your cottage after guests, it will be expensive but worth it if you can’t be there yourself.
Insurance implications can get complicated
Let’s be honest. Hosting complete strangers in your home or cottage will always bring with it at least a minor amount of risk. Your property can be damaged, guests can get unruly, and mistakes can happen. While the Airbnb Host Guarantee provides protection for up to $1,000,000 against property damage, it doesn’t cover cash, collectibles, jewelry, pets, or personal liability. You’ll also want to look into property insurance that covers short-term rentals, as standard property insurance doesn’t apply to these situations. Airbnb is very clear that the Host Guarantee program isn’t designed to replace homeowners or renters insurance, and strongly suggests that hosts understand the terms of their insurance agreement before hosting guests. While this insurance is available as an extra rider, it is usually not in a regular homeowners policy.
Not a consistent source of income
Finally, Airbnb is unfortunately nowhere near as consistent as hosting a long-term tenant is, although it does bring with it the advantage of you not having to be a landlord and therefore subject to the tenant-favouring Residential Tenancies Act in Ontario. Guests come and go, and dry periods are almost inevitable during seasons that don’t see a heavy influx of tourists. With Airbnb and other short-term rental services, you’ll never be certain just how much income you’ll be able to generate, although if you have a property on one of the major lake systems in Muskoka you can pretty much bank on it being filled during the summer months.
If you’re looking to use Airbnb as a long-term income supplementation strategy, you may want to consider other avenues that are more consistent or easier to predict, unless you have a second cottage in the area that you can stay at regularly and don’t have to work too far away during the summer months when you will have the highest volume of guests. One way you can make the property more attractive in the fall, winter, and spring is to ensure that it is nice and toasty inside. If you have windows that are getting old, this can be difficult, and that’s where we come in.