If you’re considering investing in Canmore property, there are a few key things you should know before dipping your toes into the market.
Recently, I’ve had a number of new clients asking me some great questions. Providing guidance is something I do time and again with new buyers and investors looking at our marketplace, and I figured it was time to put some of the key answers down in hopes of helping other curious folks.
Some things in the Canmore investment property landscape will almost always be true. These are just a few of the enduring concepts Buyers come up against to make sense of what they’re seeing.
Of course, I could never expect to provide all of the answers in a single article – and ultimately every property, client and moment in the market will always be unique. With that in mind, please feel free to reach out to me directly via text, call or email any time if you have questions on our area or any specific property. No question is too small and I’m always happy to help!
In this article, lets dig into:
One time I was helping an investor client decide which townhome to purchase, in a line of four. Two were on the outside, two on the inside. My client said: “the end units are $50,000 more, but all you get is the extra wall of windows on the open side. Do you think it’s worth it?”
To this, I replied: “10, 20 or 50 years from now – no matter how much you can or want to pay – you will never be able to add a wall of windows to this property.” Not even for a million dollars.
Now, everyone’s budget and goal is different. $50,000 more may just be a bridge too far. But, with a long term asset like an investment property in Canmore, enduring features like a generous floor plan, mountain views, and great light will always encourage customers to choose your property over another that lacks these.
Focus on the features that will endure, and that cannot be added for any amount of money. They will always pay dividends.
A picture is worth a thousand words. With this in mind, I’ll provide some photos for you of a “before and after” on a 2 bedroom Airbnb my client purchased some years back. Looking at the “before” photos (untouched since 2009), it’s hard to see what this unit could become. But with the right eye and plan, what can be done with even the most dated property can be amazing. Especially when you already have enduring features to lean on. Not only did the performance of this property improve – but the sale price did as well when it came time for them to move on.
For Buyers in Canmore, and specifically with these properties, comparisons based on price/sqft don’t often make sense. Calculations like this fail to take into account things like views, finishes, outdoor space and building. Not all square feet are created equal, and our marketplace is so small and so specific that it’s really more about comparing the direct choices on the market at any given time (unless you have two highly comparable properties where it could make more sense, or as a seller in some cases).
Always go for the more compelling property. Generous floorplan, unique layout, lots of windows and great views will never disappoint.
Things like size are important to a point, but otherwise you may just be paying additional tax & fee for dead space. More heads in beds = more revenue, yes. So if you can fit 2 beds in a bedroom of a 2 bed unit (which can happen), you can start to compete with 3 bedroom properties (very uncommon) and have better revenue. But any 2 bedroom in the 800-1000sqft size is going to be comfortable for guests (vs many of the newer/smaller units), which means better reviews and more bookings from guests seeking more space. Sometimes you can have a special unit and it happens to be larger; it may not be special because it’s larger though. It’s likely special because it has a great layout, corner aspect, views, decor, etc.
This has to be a question I hear a lot. Investors are focused on buying a property in the best location. Closer to downtown? Further from downtown? How about down the road in Dead Man’s Flats or Harvie Heights?
In Canmore, the answer is often more simple than folks realize.
The Bow Valley is tight and Canmore is a very small town. Combine this with the restrictive special zoning we have for Short Term Rentals, and you get an exceptionally small and concentrated area where short term rentals exist. The vast majority of these properties are 1 & 2 bedroom resort-style condos, located along Kananaskis Way, Bow Valley Trail, Railway Avenue, and in Spring Creek. For a walk to downtown, the difference in the walking distance from the furthest to the nearest is minimal – and possibly a plus if the stroll is nice for guests.
Perhaps the most important consideration regarding location is where the unit falls within the resort. Or more importantly, its orientation (ideally NOT facing the CP rail line or busy TransCanada Highway).
When it comes to alternative locations like Harvie Heights and Dead Man’s Flats: sure, they may come at a lower price point. But ultimately these locations have none of the things visitors to our area want (trails, restaurants, shopping, activities). All things being equal, much like a mountain view, guests will always choose the property in Canmore over these areas if given a fair choice to do so – and revenues will be lower because of this.
Canmore is about 5500 dwellings. Our town is not Calgary, Edmonton, Toronto or Vancouver. This is a small mountain town! Yes, we have “neighbourhoods” – but ultimately, Canmore is a walkable little place (which is perhaps one of its most attractive features).
Looking at our local private MLS while I’m writing this, there are 98 active listings of all kinds. That includes all residential, bare land, houses, and condos. Of the 98, only 14 are zoned for Short Term Rentals, about 14% of this small marketplace. If we zoom in further, to just full-ownership short term rentals less than $1,000,000, we get just 9 listings.
Now you need to decide if you even like any of these limited options!
There will never be thousands of listings to comb through, neighbourhoods to parse. Often, in our marketplace, we are choosing between limited options that are available at that given moment. You may like one – or none. Most clients will watch, learn, and when they’re ready – make the jump on a property that strikes them. Or we can continue to wait and watch – always a valid option as a buyer.
OK – so we’re looking for an affordable, amazing, beautiful property with enduring features at a compelling moment to buy (and sold by a reasonable person). Sounds easy enough, no?
Looking at our local MLS again, let’s zero in on just “2 bedroom short term rentals <$1M”. I get a whopping 6 properties returned. Granted, it’s a very quiet time of year (early January), so let’s assume twice that amount existed – 12 properties.
There will without a doubt be more than 12 buyers searching for this desirable property at any given time (there are over 100 realtors in Canmore…), also not looking to buy dogs. Even if 25% of these agents had a single buyer with this criteria, and 25% of the 12 properties were attractive – you would have more than 8 buyers per attractive property!
Even with all of this in mind, not every property flies off the shelf in minutes. Not every buyer is ready to buy at each moment, or interested in exactly what you are. I help clients purchase desirable properties on their own terms all the time. Yes – we have multiple offer situations. But they are certainly not standard procedure.
The most important thing an investor in Canmore can do is be ready to wait and watch for the right property, at the right time. When you see it, you’ll know. And with any luck – we can get it before someone else sniffs it out.
Finally, as with any investment or property, we must always remember to think long term.
Thinking long term means that even if your property search lasts 2 years, it doesn’t mean much if you plan to keep the property for 30. You may also buy the first property you see (it happens!), and because you made a timely decision, you stand to benefit for decades to come. It means that over the life of the property, you may renew it several times. Your mortgage may be your biggest cost now, but in time, this payment will shrink and disappear – while ideally revenues tend to increase. With compounding, much of the real magic happens the longer it continues.
When you own assets, forces like inflation and time can work in your favour. I am a shareholder in Warren Buffett’s company Berkshire Hathaway, and love to read his shareholder letters to learn about the magic of investing. I always think about his purchase of American Express (and countless others). His initial stake cost him $300M; years later the company pays him that much in dividends annually alone!
There are many real estate investors in Canmore (and elsewhere) who have properties that generate more than 100% of a return on their initial investment annually today, simply because of the choice they made many years ago when they purchased. They also have had the diligence to stick it out through thick and thin.
Of course no one can see the future, and things may be different than the past. But that will always be true for any investment.
Of course, we only can cover so much in an article like this. Speaking with clients and expanding on these ideas and answering their questions is maybe my favourite part of real estate. My focus is always on the needs and goals of my clients throughout any search or transaction.
If you have questions about investing in Canmore, investment properties, long term or short term rentals – please feel free to reach out to me directly. No question is too small and I’m always available via text, email or call. Helping investors and their families is what I do best!
Cheers!