Choosing Between Long Term Tenants and a Vacation Rental for Your Canmore Property
Choosing between listing your rental property in Canmore for a short-term vacation rental or a long-term lease requires careful consideration of various factors, including market trends, financial goals, property management preferences, and local regulations. Canmore has a vibrant tourism industry, a popular destination known for its stunning natural landscapes and outdoor recreational activities, but it's also a great place to live and features a strong long-term rental market.
As you decide what type of rental proeprty you'd like to have, here are some things to keep in mind.
Consider Your Commitment
A great place to start as you decide between long term and short term rentals is to consdier how much you are ready to commit to the property. Short term rental properties generally require more time to management, or a higher cost for a property management team. Long term rentals are generally a more passive source of income, but usually bring in less monthly revenue, as well.
Ask yourself how much you are ready to invest in preparing the property, maintaining it, and marketing it. These are ongoing responsibilities that can define your experience as a real estate investor.
Short Term Vacation Rentals
Demand for Vacation Rentals
Canmore attracts a significant number of tourists throughout the year, especially during peak seasons. Listing your property as a short-term vacation rental can capitalize on the steady flow of tourists seeking temporary accommodation, potentially leading to higher rental income during popular travel periods.
Keep in mind that the demand for short-term vacation rentals in Canmore may fluctuate with seasonal changes, such as the ski season, summer months, and holiday periods. Understanding these fluctuations can help you plan your rental strategy and optimize your property's occupancy rates throughout the year. While there are busier seasons, short term vacation rentals in Canmore generally maintain a high occupancy rate all year round because of the steady demand from tourists around the globe.
Opting for short-term vacation rentals provides you with the flexibility to use the property for personal vacations or to accommodate family and friends during specific periods. This can be advantageous for property owners who value the option of enjoying their property themselves while generating rental income during other times of the year.
If you are deciding between investing in a vacation home or an income property in Canmore, a short term vacation rental might offer the best of both worlds.
Short-term vacation rentals in popular tourist destinations like Canmore often yield higher rental income per night compared to long-term leases. By setting competitive rental rates and providing desirable amenities, you can maximize your property's income potential, especially during peak travel seasons and holidays.
While short term vacation rentals are often able to bring in more monthly revenue, remember that they also tend to require a more significant upfront investment. Stocking your vacation rental to be comfortable and appealing, attracting your ideal guests, will require furnishing, decorating, and keeping up with consumable products like paper goods.
Managing a short-term vacation rental typically requires more hands-on involvement, including overseeing guest check-ins, cleaning services, and property maintenance between bookings. Consider the time and resources required for effective property management or enlist the services of a reputable vacation rental management company to handle these tasks on your behalf.
Long Term Lease
Opting for a long-term lease can provide you with a stable and predictable rental income stream, as tenants typically sign leases for extended periods, ranging from several months to a year or more. This consistent cash flow can contribute to a reliable financial outlook and help cover ongoing property expenses. It may also help you more confidently determine your budget.
While not always the case, long term leases will generally produce a lower monthly rental rate than short term vacation rentals, but they also tend to require less ongoing management effort.
Less Management Commitment
Long-term leases often involve less frequent turnover and reduced management responsibilities compared to short-term vacation rentals. With longer lease terms, you may have fewer maintenance requests and turnover-related costs, allowing for a more hands-off approach to property management.
Long-term leases can foster a sense of stability and community within the property, as tenants establish a more permanent residency. This can lead to better-maintained properties and a lower risk of vacancy, providing a sense of security for property owners seeking a consistent occupancy rate.
When leasing your property long-term, thorough tenant screening is essential to ensure reliable and responsible tenants. Additionally, establishing clear guidelines for property maintenance and repair responsibilities can help mitigate potential disputes and ensure the upkeep of your rental property over an extended period.
Ultimately, deciding which way to go with your investment property comes down to a list of pros and cons. Remember that whatever you decide, there's no reason you can't pivot if you change priorities. Don't let analysis paralysis lead you to miss an opportunity.
Ready to begin the search for your Canmore investment property? Contact us any time.