If you're looking for a lucrative investment opportunity that also allows for some rest and relaxation, purchasing a cottage in the Parry Sound and Muskoka area and renting it out on Airbnb might just be the perfect solution. In this blog, we'll explore the financial benefits of owning a cottage in this beautiful region of Ontario, Canada, and how renting it out on Airbnb can generate a steady stream of income.

Rental Income

One of the most significant financial benefits of owning a cottage in the Parry Sound and Muskoka area is the potential rental income. This region is a popular destination for tourists looking to escape the city and enjoy the natural beauty of the region. As a result, there is a high demand for vacation rentals, especially during the peak summer months. With the help of Airbnb, you can rent out your cottage and generate a steady stream of income while you're not using it. However, be sure to use a locl Realtor knowledgeable of the local townships to know which townships have STR (short term rental) restrictions in place.  

In fact, according to a report by RBC, cottage owners in Ontario can earn an average of $30,000 per year by renting out their property on Airbnb during the peak summer months. This can go a long way in covering the costs of owning a cottage, such as mortgage payments, property taxes, and maintenance costs.

Tax Benefits

Owning a cottage in the Parry Sound and Muskoka area also comes with tax benefits. As a rental property owner, you can deduct expenses related to your property, including mortgage interest, property taxes, and maintenance costs. Additionally, you may be able to claim capital cost allowance (CCA) on the property, which can help reduce your taxable income.

Capital Appreciation

Another significant financial benefit of owning a cottage in the Parry Sound and Muskoka area is the potential for capital appreciation. This region has a reputation for being a desirable vacation destination, with a limited supply of waterfront properties. As a result, the value of these properties has been steadily increasing over the years. According to the Lakelands Association of Realtors, the average sale price of waterfront properties in the region was $1,053,873 in 2020, representing a 29.6% increase over the past five years.

Conclusion

Owning a cottage in the Parry Sound and Muskoka area and renting it out on Airbnb is a smart financial decision that offers a range of benefits. With the potential for significant rental income, tax benefits, and capital appreciation, it's an investment opportunity that is hard to ignore. Not to mention, you get to enjoy the beautiful scenery and outdoor activities that this region has to offer. So, if you're looking to make a smart investment while enjoying a little slice of paradise, consider purchasing a cottage in the Parry Sound and Muskoka area and renting it out on Airbnb.