A Guide to Canmore Investment Properties

airbnb living room interior

If you are looking for a property investment opportunity, Canmore, Alberta, offers some incredible opportunities. This town is rapidly growing, and so is its real estate market. Canmore hosts millions of tourists every year who are in need of a place to stay. 

The high demand for rentals due to tourism has led to a strong market for investors. Investing in Canmore allows for passive income while owning a valuable piece of property in one of Canada’s most beautiful locations. 

In this article, we are going to discuss more about why property investment in Canmore is a good idea, Canmore’s zoning setup, types of rental properties, property management considerations, and more. 

The Town of Canmore

Canmore is known for its stunning mountain views, cozy community feel, and endless outdoor activity options. Canmore attracts visitors from around the world all year who are looking to experience what the Rocky Mountains have to offer. From skiing, snowboarding, and snowshoeing in the winter to mountain biking, hiking, and fishing in the summer, there is something for everyone in Canmore. 

Downtown Canmore also has plenty to offer. You will find boutiques, restaurants, bars, art galleries and more. The downtown area has beautiful architecture that is surrounded by mountains. Even if you’re not an outdoors person, downtown Canmore is a sight to see in itself. The town is also close to Banff National Park, Calgary, and other major tourist attractions. 

Why Invest in a Property in Canmore?

Wooden building with rocky mountains in autumn forest downtown at Canmore, Canada

Rental Property Income

One of the main benefits of investing in Canmore is the ability to generate secondary income. The market has seen consistent and strong growth over the last decade. The area draws in millions of tourists each year and is also home to many hospitality staff that work in the area. However, there is a limited supply when it comes to rental properties. This means there is high demand and competitive prices, which is ideal for investors. 

If you want to learn more about how you can generate secondary income, contact our team at S&T Properties. We offer professional management models to turn your Canmore property into a passive income stream.

Property Values

Property values in Canmore have been rising steadily over the last decade. Prices have been driven by the high demand and limited supply. Short-term tourist and visitor accommodations have specifically experienced a significant increase in average sale prices. 

For instance, the average sale price for these properties in 2023 increased by 18.7% year over year with the average sale price reaching $784,112. This trend indicates potential for appreciation, making it a solid investment over time. 

Proximity to Larger Cities/Towns

Another benefit of Canmore is its proximity to larger cities and other popular tourist destinations. You might ask yourself, “Why don’t I invest in one of the more well-known towns like Calgary?” Well, you might be surprised to learn that Canmore has higher rental rates and higher occupancy rates than Calgary. 

Tourists have been turning to Canmore over other destinations, such as Banff, because it offers the same beauty and activities without the crowds and inflated prices. Tourists can still easily travel to these busy areas while having a more relaxing and less expensive vacation. 

Canmore Zoning Regulations

Rows of houses in the Canadian Rockies of Canmore, Alberta, with view of Rundle Mountain in the background.

When investing in Canmore real estate, it’s important to understand the different zoning regulations. These zoning laws were established half a dozen years ago and haven’t changed that much. The consistency of zoning in the area has been a major asset for investors. 

The key zoning categories that investors should be aware of include:

Vacation Rentals/Hotel Condos Zoning

Properties zoned as “Vacation Rentals” or “Hotel Condos” are specifically for properties that are meant to be used on a short-term basis. Buildings with this type of zoning typically have a front desk and are managed like a hotel. These units can be rented out for periods of up to 30 consecutive days. 

One of the downsides to this type of zoning is that owners are prohibited from using these properties as their primary residence. When the property is not in use, it can be left vacant or join a professionally managed rental pool. 

Investing in a property that is zoned as a “Vacation Rental,” might not be the most flexible but has the potential for high rental income due to the short-term nature of the rentals. 

Tourist Zoning Properties 

A tourist zoning property provides the most flexibility when it comes to regulations. The Town of Canmore defines “Tourist Properties” as “a dwelling unit operated as a temporary place to stay, with or without compensation, and includes all vacation rentals of a dwelling unit.” 

Owners are allowed to use these properties as their primary residence while renting them out on a short-term or long-term basis. While purchasing a property that is zoned as a tourist property might seem like a better option, it does have some downsides. These properties come with a higher tax rate, and standard mortgage financing is often more restrictive. 

Municipal Taxes

Another important aspect to note about zoning is the difference in municipal taxes. 

For properties zoned as “vacation accommodation”, the tax rate in 2023 was 10.25758. In order to figure out how much you would be paying in tax, we take the rate, multiply it by how much your property has been assessed at, and divide it by 1000. If the “vacation accommodation” property was assessed at $500,000, then the annual tax would be:

($500,000 x 10.25758)/(1000) = $5 128.79

If you own a property that is classified under “tourist zoning,” the tax rate in 2023 was 9.15981. If the property is assessed at $500,000, then you multiply that by the tax rate and divide by 1000:

($500,000 x 9.15981)/(1000)= $4 579.905

When deciding which type of zoning is better for your investment, it will largely be based on how long you are looking to rent out the property for, if you plan on living there, if you are okay with a higher tax rate, and if you will require a mortgage or not. 

Short-Term vs Long-Term Rental Properties in Canmore

Before you begin searching for the perfect rental property, it is important to consider if you want to rent it out on a short-term or long-term basis. This will affect where you are able to buy due to zoning and where you should buy based on the target market. 

Short-Term Rental Properties

Short-term rentals that cater to tourists can be highly profitable, especially during peak seasons. If you want to rent your investment property on a short-term basis, you will want a property that is close to tourist attractions. There are many condos/apartments zoned for short-term rentals in downtown Canmore that offer a great investment opportunity in an area that is targeted toward tourists. 

It is important to note that short-term rentals require more active management and must follow local regulations. Investors should consider occupancy rates, seasonal demand, and marketing efforts in order to maximize returns. As one of the largest short-term rental managers in Canmore, we can help you navigate these challenges.

Long-Term Rental Properties

Long-term rentals provide stable, year-round income and often require less intensive management compared to short-term rentals. These properties appeal to locals who are working in and around Canmore, families, and retirees. 

While short-term rentals often have higher rental rates, long-term rentals can provide more stability. If you plan on managing the property yourself and want a steady stream of income, a long-term rental property might be the best option for you. 

Property Management in Canmore

Before you decide to invest in a rental property, it is also important to think about management. Managing a property involves cleaning, communicating with guests, taking care of repairs, responding to reviews, and more. Proper property management is essential for maximizing returns.

Self-Managed 

Some investors prefer to self-manage their rental properties to maximize profits and have full control. By cutting out property management fees, more of the rental income goes straight into your pocket. With that being said, self-managing is no walk in the park. You’ve got to be prepared to handle everything yourself. That includes maintenance, tenant issues, bookkeeping, and the whole nine yards. It’s a major time and effort commitment.

There are ways to make self-managing more seamless. Setting up self-check-in with smart locks or lockboxes is one way to help make self-managing your property easier. You can also invest in some good vacation rental software. These tools let you manage bookings, send automated guest messages, track finances, etc. 

Professionally Managed 

If you want a hands-off investment experience, working with a professional property management company is the way to go. At S&T Properties, we know the Canmore rental market inside and out. We take care of marketing, screening guests, handling maintenance, interior design, cleaning, and more. 

Having an experienced property manager in your corner means receiving rental income without the headaches of day-to-day operations. If you are considering purchasing an investment property and have questions, our team is happy to help. 

Conclusion

Canmore offers a promising opportunity for real estate investors with its natural beauty, proximity to major destinations, and strong demand for rental properties. Investing in Canmore can provide a steady stream of passive income and the potential for long-term property appreciation.

By carefully evaluating your investment goals and seeking professional guidance where needed, you can start building a profitable real estate portfolio.

If you are looking to start browsing for investment properties, join our email list to get notified when off-market properties are available. If you have questions about property investment and management in Canmore, contact our team at S&T Properties.

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