The race to rent

Is the hassle and possible heartache worth renting your cottage? What you should know

By David HayesDavid Hayes


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Why owners are renting

Maggie and Dennis Robinson* found their dream plot of land on a small, secluded lake in Muskoka in 1997. Three years later, they built their dream cottage, 2,000 sq. ft. on two floors, that comfortably sleeps nine (in three bedrooms plus a loft area), with a spacious sunroom, screened-in porch, wood-burning fireplace framed in stone, pine floors, a modern kitchen, and an ensuite bathroom, including Jacuzzi, off the master bedroom. There is also a canoe, sailboard, and one-person sailboat. “Oh, did I mention that it’s the only cottage on the lake?” asks Maggie.

Although she and Dennis recently retired, for years their jobs kept them too busy to spend much time at the cottage. “We decided to rent it out because it’s such a beautiful spot and we’d like other people to have an opportunity to enjoy it,” she says. She pauses, then adds with a laugh, “And in our absence, our children were more than happy to turn it into a party palace for their friends, so we wanted to stave that off.”

Saving money

With the economy tightening everywhere lately, financial constraints are compelling more and more cottagers to consider renting, in an attempt to deal with rising taxes and maintenance costs. The trend is doubly telling with cottages, because the invasion-of-privacy quotient inherent in renting is so high. The fact that so many people are now willing to entertain the notion of strangers occupying their family homesteads is evidence of how real the pinch is.

The Robinsons are no exception—the main reason they wanted to rent, they confess, was to cover at least some of the costs of their getaway investment. At first, they used an agency, Gravenhurst-based Vacation Time Realty, a turnkey operation that takes responsibility for all the details of putting a property on the rental market. Thanks to Vacation Time, for the first three years they had an elderly couple who were, as Maggie puts it, “simply wonderful renters.”

When they needed to find new renters, they decided to save the 20 per cent commission and rent it out themselves. The couple bought an inexpensive ad on Vacation Rentals By Owner, which worked out well. The Robinsons charge $2,800 a week, or $5,200 for two weeks. Based on their past experience—“No horror stories,” says Maggie—they expect things to work out this summer as well.

The Robinsons have found a strategy for generating income that works for them. They’ve also found the truth behind an increasingly common, unspoken maxim: Today, renting out a cottage may be the only way to save it.

Boomers becoming landlords

The situation is clearest when you talk to the people who run cottage rental agencies—which have grown from mainly mom-and-pop outfits to include many large and well-run operations. “Over the past four to five years, we’ve seen quite a rise, both in people wanting to rent cottages and people wanting to rent out the cottages they own,” says Kevin Knox, who owns Water’s Edge Vacation Rentals, in Huntsville. “The demand is rising along with supply.” The ongoing economic crisis is a definite factor, Knox says. “Some former renters may not be able to afford to rent anymore,” he says, “but many people who were thinking about buying a cottage are now more likely to rent. And people who rented high-end cottages may rent a slightly lower-end one, while people who were taking trips to Europe may decide that instead of spending $10,000 on a trip to Italy, they’ll spend $5,000 to bring their whole family to a cottage.”

But it wasn’t always this way—the unprecedented situation with cottage rentals in 2009 has its roots in the unique evolution of cottage ownership over the past 30 years. For decades, the rate of vacation-home ownership in Canada changed very little. In 1977, about six per cent of households owned one—the vast majority in Canada, not abroad—and by 1999, ownership had risen by only one per cent, totalling 823,000 households. But a Statistics Canada survey of financial security released in 2006 reported that the wealth of Canadian families had substantially increased between 1999 and 2005, and a significant change was the growth in (and increased value of) real estate investments, including cottages. In 2007, a Canada Mortgage and Housing Corporation report showed that more than a million Canadian households owned vacation properties.

At this point, baby-boomer demographics met economic reality. A study done for Investors Group by Decima Research and released in January 2005, for instance, found that nearly 30 per cent of baby boomers—who represented some 30 per cent of the population, or roughly 9.7 million Canadians—planned to purchase a vacation property, recreational vehicle, or boat when they retired. If the economy had continued to bubble along, no doubt they would have. But with the recent uncertainty, a large percentage of potential buyers turned into potential renters. And many boomers who already owned cottages have become landlords.

Cottage succession

Another potential engine driving the increase in cottage rentals is powered by the new reality of cottage succession—when adult children inherit a cottage. It may have been in the family for decades, and may have sentimental value from childhood, but the kids aren’t always able to cover the costs associated with owning (which their parents quietly handled behind the scenes) or the capital gains tax, which is charged on half of the difference between the original cost (plus the cost of any capital improvements on the property) and the current market value when the cottage changes hands, even from parents to their children. Renting out may be the only way the children can avoid selling the property.

For the cottager contemplating renting out, is the relatively modest income worth the possible problems that come with renting out your cottage?

The answer seems to be a resounding “It depends.” On the financial side, while few cottage-renting ventures, professional operations aside, turn a profit, it’s an opportunity for cottagers to cover at least part of their overhead, which typically includes mortgage payments, insurance, property tax, hydro charges, and maintenance. And making a little bit extra isn’t a complete pipe dream. “It’s not as easy to make a profit as it was five years ago,” says Heather Bayer, owner of Cottage Link Rental Management. “The potential is still there, if your place is marketed extremely well and it’s year-round.”

Advertising with agencies to maximize return

Cottagers can help maximize their return in the advertising of the property. Some owners prefer the DIY approach, paying only for a spot on a website devoted to cottage rentals, such as Cottage Life’s Others favour a full-service agency like Water’s Edge, Cottage Link Rental Management, and others. Why use an agency rather than do it yourself? Because agencies can take care of much of the work, including marketing and advertising your property, fielding e-mails and phone calls that come even when a cottage is not available (“I know it says your cottage is booked, but is it really booked…?”), screening prospective renters, collecting deposits, processing payments on secure servers, arranging cleaning services after renters leave, and even offering an accidental-damage waiver—a critical consideration if you’re thinking of renting.

“We walk away from properties we don’t want to represent,” says Jan Field who, with her partner, Blain Taylor, runs the Uxbridge-based Cottage Country Travel Services, which handles 220 properties covering Muskoka, Georgian Bay, Parry Sound, Haliburton, and the Kawarthas. “We don’t need the aggravation. We recognize that these are people’s holidays.” At the very least, she adds, it’s necessary to be upfront about drawbacks. “The renters don’t want to get there and find that there’s no chinking between the logs or there’s a train track nearby they didn’t know about, or that ‘waterfront access’ means a long hike.”

On the Water’s Edge website, the 250 properties listed range from one- or two-bedroom rustics for as little as $750 a week to what owner Knox calls “mini-resorts” for up to $8,000 a week. Locations and amenities are different, he says, but a ballpark estimate for a three-bedroom cottage on a lake, with road access, electricity, running water, nice furnishings, and a barbecue, located a couple of hours north of Toronto, would be $1,400 to $1,700 a week.

One satisfied Water’s Edge client is props specialist Carolyn Souch. She and her husband, Brian Steele, who works in advertising, bought a rustic, modest cottage with Souch’s sister and brother-in-law, next door to her sister’s larger, winterized cottage on a wide stretch of the Muskoka River north of Bracebridge. Souch’s brother and his partner own a third cottage next door to Souch’s. In June and part of July, everyone congregates at the cottages. Souch’s sister and her husband live in Florida and rent theirs out the rest of the year. With a few exceptions, for instance when she likes to get away herself, Souch does the same, charging $1,000 a week.

“My sister had been renting with Water’s Edge for years, so we were comfortable with the whole situation,” says Souch. “They deal with everything and are very selective about who they rent to.”

The only problem Souch has encountered is finding a reliable cleaner. Yes, most rental agreements stipulate that the cottage must be left in the condition in which it was found but, as Knox advises his clients, “there will always be an hour’s worth of tidying to do, just to make sure it’s up to the standard for the next person.” The problem, Souch points out, is that people’s standards vary. “No one likes cleaning toilets, so the bathroom always has to be done. Same with fridges; they’re never cleaned properly. We hire someone for half an hour to do a walk-through and pay them for any time they spend on it beyond that.”

Declare rental income

Unlike many owners, Souch and her husband declare their rental income on their tax form. “Our cottage isn’t winterized, so the number of weeks we can rent is limited,” she says. “We don’t make very much off it compared to what it costs, so declaring it doesn’t make much difference to us.”

Knox recommends declaring rental income because it’s easy enough for the Canada Revenue Agency to trace any of his clients. “I’ve always been fairly aggressive about income tax,” he says, adding that it nevertheless is perfectly advisable for landlords to “write off every expense you can against the income coming in, which normally would be a net loss on paper.”

Insure the property

Regardless of how long you plan to rent out your cottage, it’s strongly recommended you inform your insurance company of your plans and receive written confirmation on the Declaration Page of your present policy of its willingness to extend coverage. If you don’t, you may be in breach of the policy and be denied a claim, says Ross Robertson, of R. Robertson Insurance Brokers in Toronto. Individual policies vary, but his company may cover a 30-day rental for no extra charge and a 60-day rental for as little as 10 per cent more.

All cottagers who plan to rent out should have a minimum of two million dollars liability insurance. And don’t forget about your boats. Andrew Robertson, of Robertson & Robertson Yacht Insurance in Toronto, says that general cottage policies usually cover “incidental” watercraft, including pedal boats, rowboats, canoes, and outboards up to 25 hp, 26 feet or less. For anything larger, owners need written confirmation from their insurance brokers that their policies are adequate. Owners must also ensure that renters have an Operator’s Card, and should provide a checklist regarding fuelling procedures, boat safety, and details of water topography, including shallow areas and the locations of hidden rocks. - Jay Teitel

The cons of renting

Dealing with bad renters

But logistics and finances tell only part of the story when it comes to cottagers renting to strangers what is, in many cases, a passion or an heirloom. Bring together a few cottagers who rent out their properties and, after happily comparing notes on their respective places, the conversation invariably turns to the pitfalls. Bad renters, rare though they are, are high on the list. Souch, for example, remembers the time both her cottage and her sister’s were rented to a family for a wedding. The kids stayed in her cottage, and someone vomited on the rug. They tried to remedy the situation by washing the rug in the river, but back on the cottage floor, it refused to reacquire its proper shape. The family subsequently offered to pay for dry cleaning. (“Everything turned out fine,” says Souch.)

Sara Klein, a retired education administrator, loved cottages and rented them for years, but as a single mother, she felt she couldn’t manage the responsibilities of ownership. Then a cousin told her to simply factor in the cost of retaining

a local handyperson, so a decade ago, she bought a place on a small lake near Gravenhurst. In 2004, wanting quieter surroundings and a larger property, she purchased a two-storey, four-bedroom cottage with a bunkie on two acres on an even smaller lake where powerboats are discouraged. “I was tired of them, and even more fed up with pwcs,” says Klein.

In July and August, Klein uses the cottage with her children and grandchildren. Her advantage is that the cottage is winterized, so she can rent it out year-round. “I’m not a businessperson but I’ve always done it myself,” she says, adding that she has advertised with agencies, including Spirit of the North, Visit Muskoka, and

“I’m selective. Eight people is the maximum. I don’t want animals. No teenagers by themselves, and I’m even cautious about young adults. My only bad experience was with a group in their twenties over New Year’s. They left garbage, and instead of keeping their bottles for recycling, they smashed them in the firepit. What were they thinking? We have little children up here.”

Nine years ago, Sally and Frank Black built a two-storey cottage on Georgian Bay. It’s on the mainland but accessible only by boat. There are five sleeping areas, two bathrooms, a 21-foot veranda, and a hot tub. It comes with a sailboat, canoe, and kayak, plus an 18-foot Starcraft tin boat with a 90-hp engine to get to the property from the nearest marina. Originally, they built the cottage for their own use and that of their two children, but their working lives changed a few years ago. Sally launched a private psychotherapy practice, and Frank, an engineer, became a home renovator.

“We needed to be working more often in the summer and we have a boat in the Caribbean, too, so we’re a little over­extended,” says Sally. “It made sense to rent the cottage out part-time. Financially, it allows us to keep it and put everything we make back into the cottage.” The Blacks charge $1,950 a week (plus a $500 security deposit) for one- to two-week periods. (“We can’t go any longer than that without going up ourselves,” says Sally.) They primarily find renters through word of mouth, but they also use

Having rented in Muskoka for years, they feel they understand the renters’ perspective. That’s why they created a detailed, 12-page manual that covers everything from what supplies to bring and operating instructions for the watercraft to information about the cottage’s infrastructure and important phone numbers (including the neighbours’).

The only serious problem they’ve had involved their boat. A neighbour saw the Starcraft hit a rock hard enough to bounce the boat out of the water, and told the Blacks about it. One precaution they take is to photograph the engine after each rental, so it was easy to prove who had dented the prop. But what made the Blacks angry was that the renters hadn’t reported it. “The few that we’ve had trouble with were people who didn’t own up to what happened,” says Sally. “It’s not about blaming anybody. We all make mistakes, but when you get up there and there are only four wineglasses instead of six, it’s a problem. If the fridge went off for twenty-four hours, let the landlords know. Trying to hide stuff is bad news.”

Preventing invasion of privacy

Finally, there’s what may be the most fundamental, emotional component involved in renting: dealing with the invasion of your privacy and having someone intrude on the enormous sentimental attachment invested in cottages. “It’s not like a business,” says Sara Klein. “This is ours, we live in it, we love it, and we want it to be respected and cared for. I try to be really careful who I’m renting to.”

Sally Black adds, “It’s natural to be hesitant at first, knowing people will be sleeping in your bed. It’s kind of weird. But we depersonalize it. We provide blankets and quilts but not sheets and towels, and we put away our clothes in bins. I think you need to neutralize it a bit for yourself as well as for the renters.”

The best advice is to remove any valuables, breakables, family heirlooms, and anything else that would break your heart if it were damaged or missing. (“Remove your kitschy family photos,” Heather Bayer suggests. “It shouldn’t be cluttered, but don’t make it sterile. It loses its atmosphere.”) At the same time, it’s important to remember that what may be a charming and folksy idiosyncrasy to your family may not be for tenants. “The barbecue is the number-one complaint,” says Kevin Knox. “Here’s what families, my parents included, would say: ‘The barbecue in the city’s not working so well, so let’s take it to the cottage.’ People paying good money for a rental aren’t going to stand for that.”

Renting can be rewarding

Ultimately, though, the necessity of renting out your cottage doesn’t mean the experience can’t be rewarding. If cottage owners are able to make it work, renting can be a gratifying, if not perfect, endeavour. Naturally, it doesn’t hurt that renting helps when trying to make it through a recession and retain ownership of a property. Certainly, Maggie and Dennis Robinson found that balance with their retreat in the heart of Muskoka. Still, like many cottage owners, Maggie insists that there are other compensations besides money. What also runs deep is a dual urge: pride of ownership, and the generosity of the cottage spirit.

“We had a sense of wastefulness if this cottage sat vacant,” says Maggie. “We wanted to share it.”


Considering renting out your cottage? is a great place to start!

This article was originally published on April 10, 2009

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May. 21, 2011

7:01 pm

How do you handle a neighbour cottager who bathes & washes her hair along with her 10 visitors . Do we have a right to say something? Also the noise & they literally take over their dock at all times with booze & totally dominating our bay. We are the most affected because we are right next door with all their activity on our side of their cottaage.& dock. We have planted extra trees, put up a small privacy lattice so we can sit on our deck with some privacy but it seems that they do not realize; consideration for other people is not in their liking. In other words me first and the heck with anyone else`s comfort. We are not alone as the cottager on the other side try to go for a swim & sit on their front deck while they are over on our side.

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