Invermere airbnb | Where to invest in Canada

Note that the information provided herein should not be considered financial advice. I am not an accountant, and recommend seeking professional guidance specific to your personal circumstances.

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In this series of posts, I analyze individual markets to help understand the best places to invest in real estate in Canada. I take a deep dive into the market trends, municipal regulations and seasonality to understand the investment potential in each market. Today I will look at Invermere, British Columbia.

Invermere BC is a desirable market for an investment property. It offers both summer and winter attractions to invite visitors, has excellent market growth potential, and has limited municipal restrictions on rental properties at this time. When considering the cost of acquisition and expected revenues, Invermere performs very well and serves as an excellent option for your investment.

I personally am focusing on Invermere for an Airbnb investment in the coming months. Should you invest in Invermere? Read on for the complete break down on on the real estate investment potential of Invermere, BC.

Why Invermere?

Invermere has a lot to offer vacationers. It sits at a 3 hour drive away from Calgary, just close enough that you could still easily head out for a weekend trip. It is nestled in the beautiful Columbia Valley, with excellent outdoor activities on Windermere Lake as well as throughout the mountains that surround it. Visitors come to enjoy the nearby Radium hot springs, white water rafting, kayaking, golf, mountain biking, hiking, and a number of other adventure sports. The downtown area is also bustling with small shops and restaurants. If you prefer to hang at the beach, it has that too! In the winter months, the Panorama ski hill is a short 20 minute drive from downtown. Although not quite as hot as interior BC, the protection from the mountains makes it especially warm in the summer months. With these amenities in mind, Invermere has a lot ot offer as a tourism destination.

Market growth and potential

*Ref: https://investcolumbiavalley.ca/tourism/*

The largest source of visitors comes from Alberta, specifically the Calgary region. This connection inherently ties an Invermere real estate investment to the success of the Alberta market overall. Alberta is well known for its boom and bust cycle, that has historically mirrored the global cycle of oil prices. Although you might be inclined to think that travel to nearby markets would fall in those bust cycles (or, as we’ve seen recently, with COVID), the opposite has proven true. Over the past several years Invermere tourism has continued to climb, population has increased, and market values have been on the rise. As Alberta has experienced economic downturns and COVID restrictions, residents have looked for vacation opportunities closer to home. This has been a great benefit to nearby markets like Invermere.

*Ref: https://creastats.crea.ca/mls/koot-median-price*

The median price in the Kootenay region is up 22% year over year, indicating strong demand. The trend has continued on an upward trajectory since before the pandemic and through to today. Overall, the market has remained strong over time and bodes well for equity growth over time. Although the most recent surge in real estate Canada-wide should be treated with caution, it is promising to see Invermere and the Kootenay region keeping pace with even the best performing regions nation-wide.

Strong demand within the area is further demonstrated in the AirDNA data on average daily rental rate (ADR). Despite the pandemic, rates have continued on an upward trend year over year. Most notably, even the lowest performing month (November) has seen a 5% increase in ADR year over year. August, the strongest performing month was up an incredible 17% in 2021.

Seasonality

Invermere tourism is heavily weighted towards the summer months, due to the many outdoor activities and warm climate on offer. In the winter months, some seasonality is hedged due to its proximity to the Panorama ski hill which makes for a wonderful winter getaway. Investors should be cautious not to overestimate winter demand as Panorama hosts its own dedicated condo developments. These developments host several hundred individual condos providing easy access to the hill. To compete with top properties in the winter months, a unique offering would be required.

Occupancy data shows that the best properties are able to maintain over 80% booked year-round. Top managed properties manage to maintain an almost perfect 100% occupancy, which is incredible. This confirms that the best properties will still see bookings, even when demand slides during the winter months. The homes in the 75th percentile still retain a high level of bookings through the winter months, however there might be a few reasons why they start to slide. The quality of the home or marketing relative to competition, pricing strategies, and host communication may all come into play as to why occupancy starts to slide.

The variability across seasons is further reflected in the revenue data. The low winter months months see revenue in the range of $3,000-$6,000, and peak at $8,000-$11,000. It is important to narrow your results more specifically to your target property type if doing a purchase analysis, as these numbers would are averages across the 142 properties with 2+ bedrooms. A large house could see months much higher than $11,000, and a small condo could easily see lower lows.

Municipal regulations

As of early 2022, Invermere has not yet imposed regulations regarding short term rentals. They have however begun to survey residents for input and feedback on potential impacts and rule changes. They have a public facing website outlining the current plans, however the policies are still very much in an information gathering stage.

Although there is no way to know what decisions will be made in the future, it is a good sign that they are taking a cautious approach, with the goal of improving the operation of STRs in the area. I would expect that to mean a focus on safety measures such as adherence to building and fire codes. For well managed STRs, this would be welcome as it can tend to weed out those that do not provide safe lodging.

The break down below is current as at April 2022. We’ll keep this updated as things change!

Category	Invermere bylaws	Rating
Current State	> The District of Invermere is currently evaluating the impact of Short Term Rentals in the area. The last update was made in late 2021. We can expect additional consideration in 2022.	A+ (with caution)
Licensing	> No licensing requirements at this time.	A+
Building Code & Inspections	> No building code / inspection requirements at this time.	A+
Parking	> No parking requirements at this time.	A+
Taxes	> BC overall requires a land transfer tax of 1% on the first $200,000, plus 2% for the value greater than $200,000 and up to $3,000,000. There is an additional 3% tax over $3,000,000. > No additional hospitality taxes required at this time.	A+
Zoning	> No zoning requirements at this time.	A+
Occupancy	> No occupancy requirements at this time	A+
Property Management	> No property management requirements at this time.	A+

Competing markets

Invermere competes with other markets in the Kootenay region, as well as other areas within a 3-5 hour radius of Calgary, which include: Radium, Fairmont, Canmore, Revelstoke, Fernie, Sicamous and Golden. Stay tuned for deep dives in each of these markets, however for now we can confirm that Invermere remains very competitive. Favourable STR regulations, reasonable cost of ownership, and strong demand all contribute to a strong value proposition in Invermere.

Summary

It should come as no surprise that I am bullish on Invermere for short term rental investment. It is a growing destination that offers excellent activities for tourists year-round. The market economics show strong fundamentals, and the municipality takes a cautious and balanced approach to regulations. For Calgary based investors and beyond, Invermere is a great location that should be seriously considered.

I am personally looking at investing in Invermere in the coming months, and can’t wait to report back on our progress. What about you? Do you consider Invermere? Do other markets catch your attention? What location would you like to see analyzed next? Let me know in the comments!