One of the biggest stories of the past 2+ years has been the explosion in popularity of the short-term rental (STR) industry and now you want to be a part of it. It is a great time to get involved as there is innovation and growth happening at an exponential pace.
In this short article we will recommend the top 10 areas to consider before investing in a Canmore Airbnb property. Smart investors want in on the fastest growing segment of the accommodation sector for these reasons and more. This is your investment, and you want to make the most out of it.
Canmore is a hot spot in Canada for STR investment with some prime properties selling in a matter of a day. Make sure you consider our recommendations before finalizing a purchase.
1. Location, Location, Location, Location
If you are like us at Hydeaway Stay, you want to make the maximum profit from your vacation rental investment. First, think about location. Canmore is located in the Rockies and the gateway to provincial and federal parks. It is perfectly situated and is an immensely popular tourism destination and was even mentioned in a recent Washington Post article.
Next, consider the size of the property, nearby and included amenities, and its location in relation to high traffic areas. All these are considered by guests before booking and will reflect heavily on the ability to get maximum revenue generation for your investment buck.
Conversely, a property in a poor location that is cramped, and has little to offer in amenities will only provide mediocre return on investment. Canmore has well established STR buildings and many more newer projects coming in the next few years. Ask about these as investment opportunities.
2. We’re full.
Occupancy rate is important too, and in general, Canmore’s STR average is approximately 63% year-round. Expect summer to be the high season and super busy with occupancies from 85-100%, and the rest of the year to be average with weekends, special long weekends, and holidays, providing some much-needed boosts to the bottom line.
Some STR management companies, like Hydeaway Stay, also offer marketing and revenue management to help you as an owner keep your Canmore vacation rental property as full as possible at the topmost rate that the market will bear.
3. How much a night?
The ADR or the Average Daily Rate, is the average daily price you can expect to charge for your STR over a period of time, typically a number derived over the course of a month or a year. Obviously, the higher this number the better. Ask the seller of the STR property for data on occupancy and ADR, or if it is a new property, for a revenue forecast of pro-forma. This will give you an idea of what you can expect for returns on your investment.
According to AIRDNA, Canmore’s current year-round ADR for all STRs is an astonishing $259 (April 2022). With many countries dropping pandemic mandates, and an expected increase in international travel, Hydeaway Stay anticipates ADR and occupancy to only go up for Canmore in the coming years.
4. Vacation Property For Sale.
As with employing a vacation property manager, hiring a knowledgeable real estate professional can remove so much of the hassles and hurdles of finally owning an STR property. They know the properties well and can often help with areas such as financing or finding a full-service property management company like Hydeaway Stay, to look after every aspect of the day-to-day operations for you. Some locations are better than others, as are some buildings. A realtor professional will be able to help you navigate HOA fees, reserve funds, major common area projects, and much more so you can make an informed decision on this important investment.
5. Mortgages.
Mortgages can be the biggest consideration as many larger lenders have more conditions for STR financing than on a primary residence. Most of the big banks require a down payment of at least 35% here in Canmore. This can make STR investing more difficult but not impossible.
Let’s not forget that we have not seen inflation like what we are currently experiencing in about 40 years. In 1981 the prime lending rate rose to a staggering 22.75% as a result. It is unlikely that such a phenomenon will ever happen again, but buyers of STR properties should expect rates to increase in the near term and for lenders to be a bit more hesitant. As of publication of this article prime rate is currently 2.7% up from 2.45% (April 2022).
6. You can’t operate here.
Make sure the property you are investing in is zoned for short-term rental. If it is a single-family home in a residential neighborhood, it is likely that the zoning does not allow for your business to operate there. In Canmore, there are many kinds of zoning. Some homes are designated Tourist Homes, some buildings are entirely Vacation Zoned known as Condo Hotels, while others have Mixed Zoning or a mixture of permanent residents, long-term renters, and STRs all in the same building. In general, we recommend a tourist home or a condo hotel property for investment.
7. Pay the piper.
Taxes, Utilities, Insurance, and HOA/Condo Fees should all be part of your purchasing deliberations, but don’t take them at face value. For example, often HOA/Condo fees can be high because of pools, hot tubs, elevators, and heated underground parking, but remember that these are exactly the factors a guests considers before deciding to book with you.
Those same amenities can help you price your nightly rate higher compared to your competition in a building with fewer selling features. Hydeaway Stay recommends keeping an eye on the bigger financial picture, looking at the entire potential income vs expenses (I&E) before committing to a property purchase.
8. Large or small property.
It depends on your financial capabilities and goals, but in general, the larger the property, the better its ability to generate income. Larger properties, located in high traffic tourist towns of zones appeal to:
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- Families who want more space for adults and kids and want to save a bit on restaurant expenses
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- Friends who want to cost share with others without compromise on quality.
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- Corporate getaways that require many bedrooms
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- Digital Nomads who are working away from home for an extended period and don’t want a cramped hotel room and the ability for the family to come visit them on the weekends and have space for everyone.
Conversely, if a larger square footage is out of your financial comfort, your needn’t worry, smaller properties can still get amazing results by attracting:
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- Singles looking to get away, exercise, meditate, or read a book
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- Couples who are looking for a romantic getaway or time to reconnect
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- Retirees enjoying time with each other travelling and exploring new places
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- Digital Nomads looking for a beautiful place to set up a virtual office in.
A professional full-service Canmore property management company like Hydeaway Stay can help with some of your financial deliberations by providing a forecast or pro-forma to see what your property could potentially generate for revenues over the course of a full year. Having a more accurate idea on your rate of return will help in your purchase.
9. Operating costs
Some operating costs such as taxes, utilities, and condominium fees have already been mentioned, however the bigger ones to consider are daily business operational costs such as housekeeping, resupply, laundry, travel agent commissions, maintenance & repairs, guest requests, accounting, guest service (concierge), and emergency response, to name some of the more common ones.
All of these will cost you money as an owner and operator, and more importantly, time. Hiring a full service management company, and having a full team of professionals looking after the day to day, can help greatly in saving on your valuable time and can make STR profit generation easier, reduce the daily hassles, headaches, and stress.
10. I want to talk to the manager
These words can bring fear into the heart of many STR owners. Managing your property alone, while very rewarding, isn’t as easy as some may have you believe, especially when details are overlooked, and mistakes are made.
As the photo above suggests, our professionals at Hydeaway Stay know from decades of experience that many times guests may want to speak to the owner or manager to complement the team and tell us about the terrific experience they are having.
It does beg the question though. Are you going to manage the property yourself or hire professionals to help? Organizing housekeeping, coordinating repairs, answering guest questions, or handling late night emergencies, all consume time and money and can be doubly difficult to deal with when you live hundreds, or even thousands of kilometers away.
With well over 30 years of experience in hospitality, Hydeaway Stay are the professionals who know accommodation operations inside and out and mitigate many issues before they even come up, creating wonderfully memorable stay experiences for guests consistently. When things go bump in the night, those same decades of experience come to bear in guest recovery techniques that thoroughly address any issues and maintain guest loyalty.
For many, a full-service vacation property managemer is the best option
We at Hydeaway Stay know how fun and rewarding hospitality can be; there’s no denying it. We absolutely love what we do. If you are new to all of this, and have never worked a day in a hotel, or live very far away from your STR property, then there are likely more reasons to have full-service vacation rental management than there are reasons to go it alone.
Hydeaway Stay is a North American vacation rental brand that brings a promise and premium standards to a market that doesn’t always hit the mark. We’ve all heard the stories of disappointment in Airbnb when, upon arrival, the STR was not as advertised. It doesn’t have to be that way. Hydeaway Stay is here to re-establish trust; that owning a short-term vacation property can be fun and carefree with Hydeaway Stay.
If this sounds like something you’re interested in, get in touch with us to find out more.
