The Muskoka short-term rental (STR) market has entered one of its most transformative years yet.
The latest 2025 performance data from AirDNA, combined with new township-level regulations, has created a landscape full of opportunity — and risk — for cottage owners.

Revenue is up.

Luxury demand is surging.

Licensing laws are tightening.

This research is drawn from comprehensive 2025 performance data, and the insights presented here are designed to help cottage owners plan for success in 2026.
If you own a cottage in Muskoka or plan to convert your property into a revenue-generating rental, this guide breaks down everything you need to know.

📊 2025 Performance: The Submarkets Ranked

Across the region, all major submarkets reported revenue growth and expanding guest demand — but not evenly. Here’s how each township performed in the past 12 months:

1. Muskoka Lakes — The Top Performer

• $77.7K annual revenue potential

• $818.5 average daily rate

• Luxury, multi-family travel drives the market

• Strongest long-term appreciation and premium guest demographic

2. Georgian Bay — High Revenue, Low Barriers

• $73.7K annual revenue potential

• $550 average daily rate

• Waterfront and unique views give owners superior pricing power

3. Gravenhurst — Balanced & Reliable

• $70.8K annual revenue potential

• Strong occupancy, stable year-round tourism

• One of the most accessible licensing frameworks

4. Bracebridge — Popular but Regulated

• $63.8K annual revenue potential

• Solid family travel demand

• Higher licensing costs for owners

5. Lake of Bays — Strong Mid-Luxury Market

• $63.2K annual revenue potential

• High appeal for nature, boating, and premium stays

6. Huntsville — High Occupancy, Low Revenue

• $61.9K annual revenue potential

• 52% occupancy (highest in Muskoka)

• Lower nightly rates and strict regulations limit revenue potential

📈 Year-Over-Year Trends: What’s Actually Growing?

The data shows clear, powerful shifts:

Revenue is up +7% YoY

This is driven largely by larger cottages, premium amenities, and extended seasonal travel.

ADR (Average Daily Rate) is up +2%

Rates are rising slowly, but the number of high-value stays is increasing rapidly.

Large cottages dominate

Five- to seven-bedroom waterfront homes outperform smaller units by a significant margin due to group travel and multi-family bookings.

Off-season demand is up

Guests are increasingly booking Muskoka for shoulder-season stays, corporate retreats, and wellness trips.

🔧 The Amenities That Matter Most in 2025

Not all upgrades pay off equally. Based on 2025 booking data, the amenities with the highest revenue impact are:

Top Revenue-Boosting Amenities

• Waterfront access & private docks — #1 driver of nightly rate

• Hot tubs & saunas — extend occupancy into fall/winter

• EV chargers — fastest-growing amenity demand in Muskoka

• Pet-friendly policies — significantly increase occupancy

• High-speed Wi-Fi — essential for remote workers and families

• Kayaks, paddleboards, and outdoor equipment — inexpensive but high-ROI upgrades

For cottage owners preparing for 2025–2026, investing in experience-driven amenities is one of the simplest ways to boost revenue without major renovations.

⚖️ 2025 Licensing Breakdown: Rules You Must Not Ignore

Muskoka’s townships are tightening their STR regulations.
Here’s a township-by-township summary of what cottage owners must know:

Huntsville — The Strictest Market

Huntsville has introduced some of the most challenging rules for STR owners:

• Licences do NOT transfer to new owners
  (If you sell your licensed cottage, the buyer cannot rent it right away.)

• New owners must hold the property for 12 months before applying

• 250-unit cap across the township

• STRs not allowed in UR1 zones

• 4% MAT applies beginning in 2025

Impact:
This significantly restricts growth, reduces resale value for licensed cottages, and complicates investment strategy.

Bracebridge — High Cost, High Control

• $1,500 annual licence fee

• Demerit system penalizes violations

• Strong demand but requires disciplined operations

Gravenhurst — Most Owner-Friendly

• $750 annual licence

• No licence cap

• Straightforward zoning rules

• Excellent balance between flexibility and demand

Lake of Bays — Structured & Slow

• Licensing required

• 45-day approval timeline

• STRs only allowed in proper zones

• MAT begins in 2026

Georgian Bay — Low-Friction Registration

• Registration instead of full licensing

• Fees between $250 and $1,000

• Easiest township for new STR operators

Muskoka Lakes — High Revenue, Evolving Rules

• Full licensing required after Dec 31, 2025

• Summer restrictions start in 2026

• Two-person-per-bedroom rule unless septic allows more

• Highest nightly rates and income potential in Muskoka

🚀 Where the Opportunities Are in 2025

For cottage owners planning to rent in 2025 or 2026, the top three markets with the best return potential and lowest regulatory friction are:

1. Muskoka Lakes

Best for luxury and premium returns.

2. Georgian Bay

Best for new STR owners and low-friction licensing.

3. Gravenhurst

Best for stable, predictable revenue with clear rules.

Bracebridge and Lake of Bays remain strong secondary markets, while Huntsville requires extreme caution due to its licensing restrictions.

📣 Free Custom Revenue Report for Cottage Owners

If you own a cottage anywhere in Muskoka, you can now receive a free, personalized earnings projection based on:

• Your cottage’s size

• Its township rules

• Its amenities

• Real performance data from comparable listings

This report helps you decide whether to renovate, rent, or reposition your cottage in 2026.

Visit HomeseekerHomes.com to request your complimentary analysis.

🏁 Final Thoughts

The Muskoka STR landscape is evolving faster than ever.

Revenue potential is rising, but strict licensing policies and shifting guest expectations mean cottage owners must operate strategically.

Whether you’re already hosting or planning your first rental season, understanding the township rules — and using real data to guide your decisions — is the key to maximizing your cottage’s performance.

Find out your cottages true potential with Homeseeker today!
https://www.homeseekervacation.com/cottage-owner