Launching an Airbnb in Canmore
Our team is often asked “what goes into launching an Airbnb in Canmore, Alberta?”. For those that don’t know, Canmore is highly regarded as one of the top Airbnb markets in Canada. It started off as a small drive-through town for tourists migrating from Calgary International Airport to Banff National Park. As the demand for tourism ramped up in Banff so did Canmore’s tourism economy. Now the small town has grown into an international destination for travellers and is an amazing place to visit.
If you’re deciding if you want to launch an Airbnb in Canmore or Banff this article is perfect for you! We’re going to uncover the costs and benefits of launching an Airbnb in Canmore and why it is a perfect time to get started.
Cost of Ownership in Canmore
The reality is, Canmore, Alberta is an expensive market to own property in. As of July 2018, the average home price in Canmore was a staggering $676,000, which is about 40% more than Calgary. While the costs of ownership might scare some, they also provide a great opportunity. High cost of ownership means only few people will be able to afford the housing which results in less short term rental competition.
The financing on short term rental properties in Canmore is extremely difficult. Due to the tourism accommodation zoning bylaws most banks will not lend on the properties unless you have a minimum 35% downpayment. So even for a low cost Airbnb you could be putting down upwards of $100,000+. Again, these numbers are massive and very difficult to justify, but if you can get in you will have a lot less competition. Even if people have the money to put 35% down, most of them will refuse because they think it is just too costly.
Most of the strata’s in town have very high monthly fees since they offer several amenities and need constant maintenance due to the tough climate. It is not uncommon for strata fees to range from $450 - $700 per month. Speak with your real estate agent and carefully look through the strata minutes to identify whether they’re proactively maintaining the building. Paying a lot in strata fees can feel like wasted money, but in the long run the cost of low strata fees is a lot higher! If the property is being well maintained and looks great your guests will appreciate that and even be willing to pay more.
Airbnb Revenue Projections in Canmore
Knowing how much the cost of ownership is super important, but without knowing how much Airbnb revenue can be generated it just seems like a waste. What is the true potential of an Airbnb in Canmore?
|Property Type||Projected Revenue|
|Studio||$30,000 - $46,000|
|One Bedroom||$38,000 - $ 56,000|
|Two Bedroom||$55,000 - $75,000|
|Three Bedroom||$82,000 - $114,000|
As you can tell the annual revenue for Airbnb’s in Canmore are extremely high. The average occupancy is around 60% and the average daily rate (ADR) is a staggering $277. The high season is typically in the summer where you will see occupancy reach 90+%. The Spring and Fall are usually quieter and perfect times to deep clean and update your unit.
Leasehold in Banff vs Freehold in Canmore
All properties within Banff National Park are leasehold properties. This means you do not actually own the land you’re purchasing, rather you’re the tenant of Banff National Park. Leaseholds are typically cheaper in price, but extremely difficult to get financing for. Banks primarily consider land value when determining how much to finance your home, but in the case of leaseholds, you do NOT own the land so they cannot evaluate it properly.
Freehold property is the most common property type. It is very likely the house you live in is classified as a freehold property. It simply means the owner of the house also owns the land and it is not being rented from the government, any native tribes or private corporations.
Why does this matter?
When deciding to purchase an investment property it is very important to know the land classification. If you’re purchasing a piece of property for long-term appreciation then freehold is likely the best option because history shows that land value increases. If you’re seeking a strictly cash flow opportunity then maybe a leasehold will be a perfect match for you.
Most investors are seeking freehold opportunities and that is exactly what Canmore offers. Since Banff National Park is federally owned land you cannot and will never be allowed to own the land in Banff. Canmore is the closest tourist town to Banff National Park and it offers primarily freehold property.
Access to Calgary
Most tourists planning a vacation to Banff National Park have to fly into Calgary International Airport before departing on the 1.5 hour drive to Banff. Canmore, Alberta is perfectly situated 1 hour from Calgary’s downtown core and 0.5 hours from Banff’s town centre. Being located just one hour from Calgary provides the huge economic benefits of a major city without the headache of actually being in a city.
Since Canmore is a quick 1 hour drive from Alberta’s major city many Calgarians plan weekend trips out to Canmore and/ or Banff.
When most people think of Alberta they often think of cold wintery weather, but Canmore’s high season is actually during the summer months. Thousands of tourists embark on the community every year to engage in many of the amazing outdoor activities that the sunny weather offers. Most tourists cannot stand the cold winters in Alberta so they choose to visit when it is warmer.
That being said, the winters are still very busy! Canadians love winter activities so to them it is the perfect place to stay. They’re able to visit multiple ski resorts in just one weekend.
|Summer||50 - 60%|
|Fall||5 - 10%|
|Winter||30 - 40%|
|Spring||10 - 20%|
Airbnb Legality in Canmore
Yes, renting your property on sites like Airbnb, VRBO, and HomeAway is legal in Canmore. Assuming your property is either a Tourist Home or Visitor Accommodation zoning then you should be fine to operate as a nightly rental. But some stratas have outright banned such activities from happening.
There are two zoning options for short term rentals in Canmore:
Own and live in my home whenever I wish for as few or as many days per year. If I chose, I can rent out my home on a long term basis. I can do this myself or through the services of an established property management company at ~10% of gross. If I choose, I can rent out my home on a short-term basis (nightly or weekly) either by myself or through the services of a vacation rental company.
Purchase a hotel suite condo and have personal use of it for up to 30 days at a time, year round. The balance of the time I can choose to leave it vacant or place it in a cooperative rental pool professionally managed. This rental to tourists will generate revenue that can be used to pay my taxes, condo fees and utilities.
Airbnb Property Management Services in Canmore
Most people don’t want the headache of dealing with guests, organizing cleaners and ensuring the property is always showroom ready. That is where Airbnb property management companies come in!
The best way to ensure your Airbnb is successful is by partnering with a reputable management company. At Lifty Life Hospitality we offer our homeowners a full-service package that takes care of guest interaction, professional cleaners, photography, financial reporting and our linen share program. Our team has extensive experience working with some of the largest online travel agencies in the world and consulted with some of the largest hoteliers on pricing strategies. We’re well equipped to manage any Airbnb property in Canmore.
Airbnb in Canmore Main Takeaways
High real estate costs in Canmore
35% down payment minimum
Average strata costs vary between $450 - $700 per month
Annual Revenue ranges from $40,000 - $115,000
Most real estate is freehold in Canmore
Only 1 hour drive from downtown Calgary
Summer is peak season
Winter’s are still strong
Airbnb is legal in certain zoning
Are you thinking about launching an Airbnb in Canmore?
Here at Lifty Life Hospitality we manage multiple vacation rental properties across British Columbia and Alberta. We originated in Canada’s top tourist hotspot, Whistler, BC. With a knack for providing excellent customer service and generating top-tier revenue we’re Canmore’s #1 choice for Airbnb property management services.