Buying an investment property in Canmore has proved very lucrative for those who choose wisely. Not only in the time that investors have held the property, but the future of Canmore’s real estate market will be strong for years to come.
Canmore is a world-class resort town that is of great value (read “cheap”) compared to Vail, Aspen, Whistler, Lake Tahoe, etc. The idea of owning a slice of the Canadian Rockies may sound far-fetched to some people, but there is a way.
We pride ourselves in helping people obtain their dreams and structure the purchase in such a way that it is advantageous both short-term and long-term. Whether you are looking to own a secondary property for you and your family and friends to enjoy or a rental property that serves short-term rentals, there is a way.
We dive into 8 tips when buying a Canmore investment property. Let’s get started!
1. Get Your Financing In Order
If you require financing, you must speak to your lender, whether a mortgage broker or a local bank. Note: financing can be a little tricky here in Canmore. We highly recommend speaking to a local mortgage specialist to ensure your deal closes. For those looking to invest in a rental property in Canmore, it is wise to leverage with bank financing (i.e. other people’s money.) Interestingly, many Albertans who purchase in Canmore and spend in the $2 million range rarely have a mortgage. A particular type of financial conservatism is found here, not in the rest of Canada. That being said, it’s more important to invest in real estate if you have the funds sooner rather than waiting until later when you can pay with all cash. Enjoy the benefits of your investment today and in the future.
What To Know When Buying An Investment Property In Canmore
2. Choose The Neighbourhood Wisely
Real estate success is built on wise neighbourhood choices. The adage of Location, Location, Location is true. It’s important not to lose track of this, no matter what other buyers may do. Stick to the fundamentals. Purchase quality builds in top-notch neighbourhoods to ensure that you are in the best position for growth and protect your downside in the case of a market contraction.
Explore Canmore’s Neighbourhoods
3. Type Of Property?
It’s essential to be clear on what your needs are. Do you need land, a single bedroom, maybe four bedrooms, etc.? Once you have a clear sense of the space that you require and have clarity on the affordability front, it will help us align you with the best investment property that suits your goals, whether a condo, townhome, half duplex or detached home. Note that a detached property will cost more often than not, but there can be more significant gains in value over time. If you want to be more hands-off, then a condo or a bare-land condo may be the best fit. It’s all a part of the conversation and what best suits your goals. Note that Canmore’s zoning can be complicated, especially with rentals – this is a deeper and worthwhile conversation we have as a team with our investors.
➤ For more information on Canmore real estate, check out:
- Canmore Neighbourhood Guide
- Investing In Canmore Real Estate
- Why You Should Buy A Vacation Home In Canmore
- Buying An Investment Condo In Canmore
- Looking To Buy In Canmore?
4. Vacation Getaway or Rental or Both?
If you want to rent it out, what’s the cash flow like? What are the rental trends in town? (We can tell you that rents are skyrocketing with the growth in work-from-home trends and the increase in Canadian tourism.) If you are looking to rent out the property, it’s essential to decide whether you want short-term rentals (higher cash flow but more time intensive and/or cost to have someone else service a site like Airbnb.) If you are looking to vacation or use your Canmore home as a getaway with family, that will take us down a different route.
5. Know Your Lawyer Fees
Like any investment, it is essential to understand your costs to acquire and maintain the asset. Knowing the lawyer fees to close on a property and re-finance and sell a property. Knowledge and research are essential to success.
6. Alberta Property Registration Fee
Alberta has a property registration fee (not a land transfer fee like many other provinces and some cities in Canada.) This property fee is made up of the value element (as of the time of this writing): $50, plus $1 for every $5,000 of the purchase price, rounded up. This is far cheaper than Toronto, Ontario, which has two land transfer fees which in most cases cost tens of thousands of dollars in cash at closing. Here in Canmore, Alberta, you typically look at sub $1000 to close, but it depends on the house’s or condo’s value.
Get Started With Your Canmore Investment Today
7. Carrying Expenses
If you are financing the priority, what are your costs to carry the mortgage? What are the utility costs (Canmore has a long winter, and heating bills can continue into May some years)? Garbage and recycling fees? Water and sewage fees? Snow removal if you aren’t buying a condo or bare land condo! Security features? Do you want a property manager? Knowing the costs for each expense line item is integral so that you have a clear financial picture before purchasing a home in Canmore.
8. Ownership Horizon?
How long do you want to own your investment property? Like all wealth growth in real estate, it is about buying and holding. And for those who are very savvy, it is about buying and selling up into other investments but always remaining invested in real estate. It’s essential to know the timeline for your investment. Is this a long-term hold that you plan on passing down to children, or is this simply an investment that you wish to utilize for the next few years? It’s essential to know how long you plan on holding. If it is sub-three years, we would call it speculating versus investing. If you plan on holding your real estate investment for three to five years, you are looking more long-term. We are seeing more and more investors looking at the very long-term; in many cases, they have zero plans to sell, ever.
