Buying Property in Canmore: Canmore is one of the top tourist destinations in the province of Alberta, generating more than $350 million in visitors each year. The local economy is well diversified between real estate, retail, tourism, and housing, while the broader Albertan economy is primarily driven by oil and natural gas.
Canmore offers a lucrative real estate investment opportunity for anyone looking to take advantage of local tourism.
Benefits of Buying a Property in Canmore
There are lots of benefits to buying real estate in Canmore, Alberta. This small town contributes a great deal to the tourism in the province as well as providing a beautiful place to live for the locals.
Proximity to Banff National Park – Canmore is a quick 20-30 minute drive to Banff and as a result, it can attract a large number of tourists who are driving from Calgary to Banff. Because of its proximity, many tourists struggle to decide between staying in Canmore or Banff.
With such proximity to one of Canada’s largest cities, it has a considerable number of locals who live in Canmore and come to Calgary for their office jobs.
Freehold Vs. Leasehold – Unlike Banff, nearly all real estate in Canmore is classified as “freehold,” which is your most common property type. Since real estate in Banff is technically within a national park, none of the landlords have ownership of the land on which their property is built.
Lowest Property Tax Rates while Buying Property in Canmore – Canmore has some of the lowest property tax rates in the province. While the tax rates are low, the cost of real estate is quite high, which causes upward pressure on the real cost of property taxes.
Growth in Population and Household Income – For the past two decades, Canmore has experienced steady growth in both base population and median household income. This is an excellent sign that Canmore’s future increase will continue to grow.
What are the types of zoning in Canmore?
If you are thinking about buying real estate in Canmore it is important to understand the main zoning classifications. In this case, there are four primary zoning types you need to be informed about.
Residential
This zoning type is most common for buyers looking for a traditional home. This property can be a single-family home, duplex, triplex, townhouse, or apartment. The homeowner has the option of living in it full-time, casually, or renting it out in the long-term rental market.
It is worth mentioning that properties in the residential area cannot be used to operate only as vacation rentals.
Visitor Accommodation
This zoning classification is generally reserved for hotel-condo suites, which are permitted only for limited personal use and can only be rented for short-term stays.
These types of properties are perfect for those looking to hire a vacation rental management company to operate their property. Most visitor accommodation complexes are limited to a maximum stay of 30 consecutive nights, which means you cannot rent these properties out to long-term tenants.
Tourist House
This type of asset is very flexible. You can choose from full-time, part-time, casual stay, long-term rental, or even short-term. Being the most desired, they are also the most expensive. In many cases, these properties are 25-50% more expensive than visitor accommodation properties. If you’re planning on renting out your property on Airbnb, this is the proper zoning for you.
Employee Accommodation
This type of property is intended for convenient and affordable housing for the local people. If you want to purchase this zoning type make sure you intend to work in Canmore for at least 20 hours/week. Multi-level councils will monitor the building to ensure that the units are not being operated as short-term rentals.
Buying a Vacation Rental in Canmore
Buying real estate in Canmore to operate it as a vacation rental can be a very lucrative and wise investment if done properly. Our team at Lifty Life Hospitality has extensive experience in the vacation rental industry and a thorough understanding of what it takes to create a successful vacation rental.
What zoning classification is required for vacation rentals in Canmore?
As mentioned above, the required zoning classification for vacation rentals in Canmore, Alberta, must be either a visitor accommodation or tourist home zoning classification.
Not all other zoning classifications would legally be able to operate as vacation rentals.
Which buildings can serve as legal vacation rentals?
Even if you are correct about the zoning classification, you may need to make sure that vacation rentals are permitted by the tier corporation. Here are some of the properties that have historically been allowed for vacation rentals:
- Canadian Rockies chalet
- the grand Rockies
- Solara Resort
- Blackstone Mountain Lodge
- Windtower Lodge
Buying a Long Term Rental in Canmore
Many investors flock to Canmore because of its desirable location, high rents, and expected long-term appreciation. It’s worth noting that in Canmore, real estate costs are much higher than anywhere else in Alberta, and as a result, it may not be the most cost-effective long-term rental investment.
Real estate costs are often worse here than in other Alberta markets when compared to long-term rentals.
That being said, if you are looking for a market with high potential for price growth, Canmore may be right for you.
Common Cost of Homeownership if planning for Buying Property in Canmore
Adjustment Cost – ($300 – $500) – You must reimburse the previous owner for any payments made after the closing date. Some examples of adjustment costs can be level costs, property taxes, and utilities. Adjustment costs are typically included in the cost of the mortgage and do not account for a significant amount.
Legal Fee – ($800 – $1,200) – Lawyers must file paperwork. This includes assistance in the transfer of funds, facilitation of land ownership transfer, and all the usual legal things.
Title Insurance – ($300 – $500) – Your mortgage provider will require this. But it’s good – it can save you the high cost of property surveying. Title insurance will protect you from addressing issues of fraud and forgery, encroachment, convenience, and non-compliance.
Property Insurance – Your mortgage provider usually requires insurance to cover the replacement value of your home and its contents. Insurance costs vary by the size of the property, when it was built, the materials it was built with, the likelihood of natural disasters, and water damage claims.
Utilities – ($75 – $100 per month) – Calculate your electricity usage, heating, and water expenses. You can ask vendors to provide you with a rough estimate on the cost of utilities, many times your utility cost will be similar to that stated by the vendor.
Home Inspection – ($400-$800) – Before buying real estate in Canmore, make sure you have a home inspector to walk you through your home and complete all repairs that need to be done. Many homeowners try to skip this step to save a few hundred dollars, but the value of a home inspection exceeds several hundred dollars. What if the home inspector finds out that the roof has been neglected for the past 20 years and could collapse at any moment?
Goods and Services Tax (GST) – (5% of purchase price) If you are buying a new house or taking vacation rentals, you will be charged GST. In some cases, usually while shopping as a business, you can defer the GST payment.
Property tax – (0.46 – 0.5% of the assessed value) – Every municipality in Canada has a property tax system that funds public education and many other civic projects.
Know the complete services in Canmore at https://canmore.ca/
