Canmore has been a safe and legal option for owners looking to get into the short term rental market for a long time.
Canmore has stunning mountain views, incredible access to Calgary and its International Airport – plus its next to one of the best places in the world to visit – Banff! It’s not hard to see why this is a fabulous location to invest in a short term rental operation.
In the current political climate however, short term rentals and Airbnbs have come under fire. As targets for the housing crisis, provinces like BC have introduced strict new rules for short term rentals. Primarily, short term rentals there are now restricted to an owners principal residence, secondary suites or ADUs. This is bad news for investors who purchased condos in places like Victoria, Vancouver and Kelowna. Many of these investors bought with the intention (and economics) of renting them solely on a short term basis. Now, they’re out in the cold.
With this, some investors are wondering if something similar could happen in a hotbed of short term rental activity like Canmore. That’s what I’d like to talk about in today’s article.
Note: this article is for informational purposes only and is not intended to advise. All due diligence has been made to check regulations, and ensure accuracy at the time of writing. As always, feel free to reach out to me directly via text, email or call if you have questions on Canmore or any properties you’re seeing. I’m here to help!
Yes, that’s right. How could short term rentals not hurt housing in most municipalities?!
When an owner chooses to rent their property or suite on a short term basis, they remove it from the pool of potential long term rentals for local workers and members of the community. This overwhelmingly effects lower income renters, seniors and young folks. First, it removes supply of local rentals, making a place to live harder to find. Second, it pressures the prices of available rentals upwards as more tenants vie for an opportunity to live there.
So why would an owner do this? It really comes down to the economics of renting. When you rent monthly or annually, typically a tenant won’t pay much more than it would cost them to own the property themselves. This means rents typically stay on pace with mortgage costs incurred by the owner.
When you rent your property nightly, you have 365 opportunities to rent per year. This is much more akin to a commercial hotel operation business. Operations costs are much higher (as you now have furnishings, cleaners, maintenance, etc.), but revenue from rental is higher as well. Some short term rentals could earn a months worth of long-term rent in just a few days during peak seasons. Hello, Cashflow!
Plus they can allow the owner the opportunity to use it when they wish. An added bonus in spectacular locations, like ours.
Canmore is different because we have had strict short term rental rules in place for years and years.
Yes – Canmore already has fierce rules around short term rentals. This is because if every home in Canmore could become an Airbnb – trust me – it would be! But, if that were to be the case, there would be nowhere for anyone to live. And in my opinion, a sea of Airbnb’s doesn’t sound like a wonderful and vibrant place to visit.
A key factor with the vast majority of Canmore short term rental properties is that they are zoned for, and in fact purpose built, to be “Visitor Accommodation.” This means they are not housing, and were never intended to be housing!
These properties are the resort condominiums like Stoneridge, Solara, Blackstone, The Lodges, Grande Rockies, and others. They were designed to welcome guests, and living in them would be a lot like living at a resort. Fun for a bit, but likely too busy for most.
The key thing to note is that these legal Canmore short term rentals do not hurt housing stock, as they were never intended to be housing. By owning one, you aren’t taking away someones home. You are essentially purchasing a commercial hotel rental property.
I would be extremely surprised if the town chose to disenfranchise thousands of owners and severely damage the local tourism economy. Visitors to Canmore spend 10x what locals do – not a bad thing for a small mountain town that used to mine coal. An attempted ban would be a legal fracas the town would have a hard time selling – especially in light of their recent $161 Million lawsuit by another property owner in the valley, TSMV.
Never say never, though. On a long enough timeline, anything could happen – especially when politics are involved. But the restrictive zoning we’ve had in place here in Canmore is, in fact, protective for owners of short term rentals. Just as it is protective for local housing stock.
Rigid local zoning ensures properties are not being misused. This means homes remain homes, and aspects of the local economy designated for visitors remain that way, too. The goal is for Canmore to remain a place where people can live and work, while also remaining a place to welcome visitors who spend. Sounds like a win-win to me.
If you’re interested in purchasing an investment property in Canmore or the surrounding area, let’s get in touch. I have helped dozens of families achieve their investment goals, while helping them find a property that is the perfect fit for their personal use needs as well. I have some of the best local contacts for management, financing, inspections, legal and more. Short term rentals can be a complex area of real estate to navigate, but with the right advice, they can be very rewarding to own.