Every week, I speak with cottage buyers, investors, and landlords who tell me the same thing, “I’m hearing the government is cracking down on Airbnbs. Should I still invest?”
Fair question, and yes, Ontario has been busy. Municipalities across the province are tightening short-term rental rules, adding licensing fees, limiting days, and issuing hefty fines for non-compliance.
It sounds intimidating, right? But here’s the truth I want you to hear clearly:
This isn’t the end of STR investing. It’s a reset, a realignment, and for many investors, it’s opening new opportunities.
Let’s break it down, Muskoka style. 🍁✨
🔥 What’s Actually Happening in Ontario Right Now?
Across Ontario, including cottage country, we’re seeing:
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Stricter bylaws such as occupancy limits, parking rules, and noise restrictions
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Higher licensing fees for hosts
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Stronger enforcement with fines from $500 to over $5,000
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Limits on the number of nights a property can be rented
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Primary residence-only rules in certain municipalities
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Mandatory safety inspections covering fire code, septic, and water systems
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Neighbour complaint tracking where repeat offenders risk losing their license
These changes didn’t appear suddenly. Cities are responding to housing shortages, community pressure, and demand for more long-term rentals.
But before you panic, Ontario is not banning STRs. They’re regulating them. Once the dust settles, compliant operators will benefit from less competition and stronger bookings.
🌊 Muskoka’s Reality Check, Not All Markets Are the Same
Here’s where many investors get confused.
Toronto rules are very different from Muskoka rules. Even within Muskoka, each township has its own bylaw.
For example:
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Bracebridge has its own licensing system
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Gravenhurst uses a completely separate process
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Huntsville, Lake of Bays, Seguin, and Georgian Bay all operate independently
If you are scrolling TikTok or reading Toronto-based articles, you may be worrying about rules that do not apply to your target lake.
This is where local guidance (hello, it’s me 👋) becomes your biggest advantage.
💡 So, What Does This Mean for Investors?
Let’s talk about impact and opportunity.
1. Short-Term Rentals Are Not Dead, They Are Becoming More Professional
The old days of “throw a mattress in the loft and hope for 5 stars” are over. Municipalities want safer, better-managed cottages.
Investors who operate like a business, using proper cleaning standards, safety checks, and guest communication, will do very well.
2. Reduced Competition Helps Good Operators
It may sound blunt, but it’s true.
Regulations push out casual hosts and leave room for serious investors.
Fewer listings mean: 💰 higher occupancy 💰 stronger nightly rates 💰 less race-to-the-bottom pricing
If you’re willing to play by the rules, this shift is in your favour.
3. Mid-Term Rentals Are Quietly Growing Fast
This strategy is exploding, especially in cottage country.
Think about:
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30 to 90 day bookings
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Traveling nurses
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Corporate relocations
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Insurance displacement clients
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Snowbirds
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Families test-driving Muskoka
And the best part, most municipalities do not regulate mid-term rentals at all.
Less regulation combined with consistent demand makes this incredibly investor-friendly.
4. Long-Term Rentals Are Becoming More Appealing
With Ontario struggling to boost housing supply, long-term rentals offer:
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Steady monthly income
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Lower turnover
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Fewer headaches
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Potential for rent indexing
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High demand in smaller markets
In towns like Bracebridge and Gravenhurst, long-term demand is strong and growing.
5. Your Property May Need a Small Strategy Shift, Not a Total Rewrite
A cottage that performed well on Airbnb does not need to be abandoned.
It might simply need a hybrid plan such as:
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Short-term rentals in summer
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Mid-term rentals in fall and winter
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Long-term options for seasonal workers
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Owner stays sprinkled in
This creates: ✔ diversified income ✔ year-round stability ✔ reduced risk ✔ community-friendly usage
Flexibility will be the winning strategy for the next decade.
🌲 Real Talk, What I’m Seeing in Muskoka
Because I’m on the ground every day, here’s the reality:
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Well-maintained cottages with great amenities are still fully booked
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Spa-style add-ons, like saunas and cold plunges, boost shoulder-season appeal
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Waterfront remains the strongest performer
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Mid-term bookings fill winter gaps
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Homeowners are improving fire and septic systems to stay compliant
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More investors are treating cottages like real businesses
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Buyers are actively seeking flexible, multi-use properties
The investors panicking right now are the ones clinging to old systems. The investors progressing are the ones adapting quickly and thoughtfully.
✨ My Best Advice if You’re Considering a Cottage Investment
Before buying, ask yourself:
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What are the rules in this specific municipality?
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Can the property generate income year-round?
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Can it pivot between STR, MTR, and LTR?
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Is it compliant with fire, septic, and water standards?
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Do the numbers still work if STR nights are limited?
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How hands-on or hands-off do I want to be?
A cottage investment remains one of the strongest wealth-building tools in Ontario, it simply requires a more strategic approach today.
That’s exactly where I help my clients feel confident and informed.
💬 Final Thoughts
Ontario’s STR crackdown is not the end of cottage investing, it is a sign that the market is maturing and elevating its standards.
If you understand the rules, follow the process, and choose multi-use properties, you will be far ahead of the average investor.
And as always, the goal is simple, Be where you want to be. Whether that’s on the water, building wealth, or creating a legacy for your family.
If you’re thinking about buying, selling, or pivoting your investment strategy, we’re here to help you build a plan that matches your goals and your lifestyle. 🌲✨
👩🏻💼 Lisa Selvage | Muskoka Realtor® | Lifestyle Property Expert | Let’s connect!
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📞 705-644-9277
👩🏻💼 Shirlene Johnston | Parry Sound Realtor® | Serving Parry Sound & Beyond
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📞 705-774-1144
