CHANGE, CHOICE, TIME & PLACE
Words by Eva Landreth, Realtor at Seasonal Properties
South Georgian Bay Rental Market Update
To live in South Georgian Bay is to embrace change and choice. The beauty of the lifestyle here is that we can often choose how and where to spend our time. In this column, I’m choosing to share my knowledge and insights about our evolving local real estate markets throughout our changing seasons. My hope is that you will use this to make informed choices about where, when, and how much to spend of your energy, resources, and time.
If you think about it, rental real estate basically comes down to time and place: Where would you like to stay, and for how long? Local rules and regulations (otherwise known as “by-laws”) also change depending on the duration and location of the rental unit. In South Georgian Bay, visiting renters and investors have two main rental categories to choose from, and they each have their own particularities when it comes to experience, cost, management, and laws.
Back in the day, the term “seasonal property” often referred to the ski chalet of a “snowbird” who would rent out their property for a song to a lucky family friend to stay and enjoy over the whole winter. The owner could thus stay warm down south in Florida while earning extra income, while a family was skiing and making use of the otherwise empty chalet—a win/win for all involved!
Today, we use the term “seasonal” to denote rentals for durations exceeding 30 days, during any season. The majority of seasonal renting families now look for a property that fits their family’s needs so that they can high tail it up here from The Big City on Thursday nights, enjoy a long weekend of activities and then endure the inevitable moan and groan about the trek home on Sunday afternoons.
Of course, 30-plus day rentals appeal to more than just ski families and those looking for recreation. Seasonal rentals are ideal for people who are renovating their homes, or who have sold their place down in the city and need a place to stay until they find “The One”. There is a plethora of reasons a seasonal rental property could be needed.
Seasonal rentals are not heavily regulated or zoned and do not require specific licensing. As such, seasonal rentals are a growing category of interest for people who wish to travel for longer periods and rent out their homes. We are also seeing an influx because of market conditions: interest rates are up, and so is the cost of running a property. So, instead of selling, it makes sense to try and rent and recapture some funds before trying to sell in a buyers’ market at depressed values.
Astute investors have seen our four-season, 12 months of the year playground and invested in a seasonal property… and it is working! Thanks to our community and the exciting activities that happen on a weekly basis.
The hiking trails are magnificent, the roads are perfect for running and cycling, the bay is perfect for cold plunges, and spending a day at the local spa is heaven on earth! Why not spend next October or November in our beautiful haven? I know I will be here!
Short-Term Accommodations (STAs) are great options for visitors coming for a night or a weekend at any time of year. Though we weren’t always a 12-month destination (in the past, tourism essentially shut down post-ski season from April through July), our area now attracts visitors year-round with skiing, golf, hiking, fishing, concerts, restaurants, main streets, cycling, the Apple Pie Trail, Georgian Bay itself, shopping, galleries, museums—the list goes on and on!
The proliferation of online vacation rental platforms such as Airbnb and VRBO created a boom in the STA market, leading to the creation of specific zoning, by-laws, and licensing requirements that stipulated where STAs were permitted. Specialized vacation rental management companies now exist in order to advise on, source, and manage units for investors and handle cleaning, turnovers, and guest experiences. These vacation rental management companies are regulated by the Travel Industry Council of Ontario (TICO). TICO is essentially the travel regulator for our province. They also must follow the municipal bylaws.
The Town of Blue Mountains has a mature, robust, and well-followed STA by-law developed and refined over the last decade. It includes designated commercial resort units (CRUs), which are a sub-type of STAs found in and around the Blue Mountain Village in specialized developments such as Cachet Crossing, Mountain Walk, Chateau Ridge, Wintergreen, Rivergrass, Sierra Lane, North Creek, etc. A professional management company can manage a CRU provided they manage 10 or more. If not, the owner must go the STA Licensing route with the Town of Blue Mountains. CRUs are an attractive investment as they are very close to the lively Blue Mountain Village and ski hills and are very attractive to visitors.
Over the last two years or so, our neighbours in Collingwood have begun the journey of developing and refining their STA by-laws and are currently in the advanced stages of implementing their own STA licensing. Stay tuned for updates in upcoming columns.
Purchase prices and average nightly rates for seasonal and short-term investment properties have cooled by roughly 18-23% from the peak of post-covid pent-up demand as seen in summer of 2022. Today, we are seeing more reasonably priced properties suited to seasonal rentals and a lower-priced, increased selection of legal vacation rentals on the market. Bookings for both seasonal properties and licensed STAs are continuing to pick up pace after strong occupancy rates in the summer and fall, presenting a strong opportunity for investors with cash in hand.
As markets evolve, they open up fresh opportunities and choices for investors, renters, tourists, and visitors—this season is set to introduce new changes and choices to our region here in South Georgian Bay, so stay tuned! E