Investing in the vacation rental market in a whole can be a solid choice for property investors looking for a great source of income, but what about choosing Canmore to invest in? There are reports circulating the net that suggest Canmore is a home-run and if you don’t buy now then you will miss out to International buyers that are snapping up all the inventory while the Canadian dollar is low. Others suggest that the town is not recession proof and investors should remain cautious. Cautiousness and a keen eye are vital in finding the ideal rental investment, but so are an open mind and a willingness to look beyond the obvious solution. We can’t pretend that Canmore is some perfect promised land with gold in those hills, but there are lots of holidaymakers in the Canadian Rocky mountains and they all want a place to stay.
What are these possible problems that can put investors off?
Before we get into the positives of the current tourism market in Canmore, let’s address two of the problems that might be holding you back from investing in this mountain town.
There is currently no booming new home industry in Canmore. Rental properties are hard to come by and there is limited land available in the town to build upon – too many pesky mountains and national parks getting in the way. This does mean that available plots and houses to invest in are limited. The upside of all of this, however, is that there is great potential and wealth to be generated from the properties that are available, provided that they are in the right community and managed well. Also, current growth may be slow, but at least it is steadily climbing rather than declining.
Canmore did experience a time of fast growth which will lead many potential investors to think back to a period of true real estate catastrophe in the marketplace. the town has suffered before so how do buyers know that it won’t happen again? The economic crash of 2008 hit hard and the effects were felt in the Canmore property market. Sales fell 57% from 2007 figures, as demand dropped, and the situation in 2009 was no better, with a further 60% drop from 2008 figures. The cost of construction permits plummeted – as did the town’s non-tax revenue. Everything ground to a halt as prices remained unattainably high and construction projects lay half-finished. At that point, supply was saturated and buyer activity was very low. Today the supply has been absorbed, demand is high, developable land is limited and builders are cautious to not break ground until they have strong presale numbers. It would be arrogant to say that Canmore hasn’t been vulnerable in the past, or that it won’t be again, but for every low point there is a recovery .
2. Canmore is not Banff.
Banff is both a competitor and compliment for Canmore’s tourism market, the attractive town next door wooing its own stream of keen visitors and any developer that can get their hands on land. Some might ask why you should invest in Canmore when you can invest in Banff? The answer is because Banff’s ‘Right to Reside’ provisions ensure that community residential lands are available exclusively for community use, rather than recreational or second home purposes (click here to learn more). Stats from the Canada Mortgage and Housing Corporation show vacancy rates at 0% for over a year and although there is huge demand for accommodations, it is challenging for investors to capitalize on. Banff definitely has it’s charm, though after spending some time in Canmore, many buyers feel they are getting more value for their money here.
It is easy to look at the potential shortcomings affecting real estate investors in Canmore, but it is even easier to look at the benefits that this town offers – to both the investor and the renter. The bottom line for many investors is that there is a strong demand for vacation rentals in Canmore because it is such an attractive destination for tourists. Talk to anyone that visits this town and they will tell you that the cold temperatures are easily forgotten thanks to the warmth of the locals, sense of community spirit and of course the welcomed chinook winds. There are plenty of opportunities to enjoy the best that the town can offer in shopping, nightlife and dining, but there is also a chance to get away from it all in the vast acres of national parks and mountain trails. Many travellers come to Canmore and the surrounding area for adventure and relaxation, whether that means skiing, golfing, mountain biking, hiking the trails or unwinding at one of the many spas.
Low Canadian Dollar-
The status of the dollar makes Canmore an even more attractive travel destination for American, European and Canadians tourists. Both Canmore and Banff have seen an impressive number of bookings already this year so it is the perfect time to invest in more rentals and reap the rewards of this trend.
It is hard to come across a TripAdvisor review of Canmore that doesn’t talk about the great views and breathtaking scenery of this small town and this plays a big part in Canmore’s worth as a town to invest in. Stats show that the average Canadian wants somewhere to retreat to for a short break away from home, somewhere that offers a change of scenery, relaxation and the chance to indulge in their favourite pastimes. Conversely, they also don’t want to have to travel too far to get to their vacation condo, so that the trip is still convenient. By investing in a Canmore vacation rental, you can capitalise on this trend because it provides that ideal middle ground – snowy wilderness and mountain escapism just 45 minutes from west Calgary and 60 minutes from the Calgary International Airport.
Demand, zoning provisions and a fantastic area make Canmore a great choice.
Not only does Canmore have some of the lowest tax rates in all of Alberta, there is flexibility in the zoning laws that gives investors more options to choose one that will suite their lifestyle/ investment needs. For instance, a ‘Residential’ zoned property may look more appealing to an investor that does not want to rent the property out on a short term basis and is not interested in their neighbours doing so as well. Properties zoned ‘Tourist home’ are great for owners that want the chance to stay in the unit for as many days per year as they choose and to rent out on different time scales while away. For the investor that is looking to use the property a few weekends per year then a ‘Visitor Accommodations’ unit may be a great fit and provide a big cost savings on the purchase. It is important to be aware that most conventional banks will not finance a unit that is zoned ‘Visitor Accommodation’ without 35- 45% down as they classify this type of purchase as a commercial investment. If you are curious about what Property Management options are available in Canmore (including VRBO and Airbnb), click here to view my blog.
Population: 13,077 (permanent) – 3890 (non permanent) (2014)
Property tax rate: 5.0046 (residential-2015)
Average price (single family home) : $943,644 (2015)
Average rent: $3,000 (four-bedroom house)
Vacancy rate: 0%
Part of the thrill of property investment is seeing the potential in something where other see the drawbacks. Investing in Canmore may not be the obvious choice to many due to the state of market, but there are hidden gems of properties remaining in this tourist town. With the right guidance, you could make a very wise investment here that provides great lifestyle and financial rewards.
I specialize in Vacation Homes in Canmore and would love to assist you. Please feel free to Contact me to discuss purchasing/investment options or Click here to create your private client search of available listings in Canmore.
Share this Post