Buying a Short-Term Rental or Airbnb Investment Property in Calgary

Buying a property for Airbnb or other short-term rental use, however, is different from purchasing a traditional home. Financing, operating costs, local regulations, property type, location, and potential rental demand all need to be considered before making an offer.

If you're thinking about buying a short-term rental property in Calgary, here's what you should know before beginning your search.

Decide How You Plan to Use the Property

Start by determining what you want the property to accomplish. Some buyers want a second residence they can use when they are in Calgary while renting it occasionally when they are away. Others are primarily interested in purchasing an investment property that will be operated as a short-term rental. The distinction matters because how you intend to use the property can affect financing, insurance, licensing, property selection, and your overall budget.

Before beginning your search, consider questions such as:

• How often will you personally use the property?
• Do you plan to offer it as a short-term rental throughout the year?
• Who is your likely guest or tenant?
• Will you manage the property yourself or hire a property manager?
• Are you prepared for periods when the property is not rented?
• Is short-term rental potential essential to your purchase, or simply an added benefit?

Having a clear strategy can help your real estate agent narrow the search to properties that better align with your goals.

Understand Calgary's Short-Term Rental Rules Before You Buy

If short-term rental use is an important part of your plans, research the applicable regulations before purchasing a property.

The City of Calgary requires short-term rental operators to obtain a business licence. Calgary's licensing framework distinguishes between short-term rentals operated from a primary residence and those operated from a non-primary residence. New short-term rental licence applications are also subject to fire safety requirements. Regulations can change, so buyers should review the current requirements directly with the City of Calgary before making a purchase based on anticipated short-term rental use.

The City's rules are only one part of the due diligence process.

If you are considering a condominium, review the condominium corporation's bylaws and other relevant documents carefully. A property may appear well suited to Airbnb or another short-term rental platform while the condominium's rules restrict or prohibit that type of use. Confirming what is permitted before you purchase can help prevent an expensive surprise later.

Build a Realistic Budget

The purchase price and mortgage payment are only part of the cost of owning a second or investment property.

Depending on the property and how you intend to operate it, your budget may need to account for:

• Property taxes
• Home or condominium insurance
• Condominium fees
• Utilities and internet
• Furniture and household supplies
• Repairs and ongoing maintenance
• Cleaning between guests
• Property management
• Short-term rental platform fees
• Business licensing and related requirements
• Marketing or professional photography
• Periods of vacancy
• Unexpected repairs and emergency expenses

When evaluating a potential rental property, it is important to distinguish between gross rental revenue and actual profit. A property that generates attractive nightly rates can still have significant operating expenses.

Building conservative assumptions into your budget can provide a more realistic picture of what ownership may look like.

Understand Your Financing Options

Financing a second residence or investment property can be different from financing the home you live in. The amount you need for a down payment and the mortgage products available to you can depend on several factors, including how you intend to use the property, the type of property you are purchasing, your financial circumstances, and your lender's requirements. For example, financing a second home intended primarily for your own occupancy may be treated differently from financing a property purchased primarily to generate rental income. Speaking with a mortgage professional before beginning your property search can help you understand your purchasing power and the financing requirements that apply to your particular situation.

Research Potential Rental Income Conservatively

If rental income is part of your purchasing strategy, research the local market before relying on projected revenue. Look at comparable properties to understand typical nightly rates, but don't stop there. Consider occupancy throughout the year, seasonal changes in demand, competition from other rentals, cleaning costs, management expenses, and periods when the property may sit vacant.

Location, property type, number of bedrooms, parking, amenities, furnishings, and access to transportation can all influence the appeal of a short-term rental. Online rental platforms can provide a starting point for understanding the competition, but advertised nightly rates don't necessarily tell you how frequently a property is booked or what the owner earns after expenses. Use rental projections as one part of your overall analysis rather than the sole reason for purchasing a particular property.

Choose a Calgary Location That Fits Your Intended Guest

The best neighbourhood for a short-term rental property isn't necessarily the same as the best neighbourhood for a traditional family home. Think about who is most likely to use the property and why they would choose that location.

Depending on your target market, proximity to the following may be important:

• Downtown Calgary and major employment centres
• Hospitals and medical facilities
• Universities and post-secondary institutions
• Transit and C-Train stations
• Restaurants and entertainment
• Event and sports venues
• Major transportation routes
• Calgary International Airport
• Shopping and everyday amenities

Walkability, parking, building amenities, ease of access, and the surrounding neighbourhood can also influence a guest's experience. Exploring different Calgary neighbourhoods can help you compare locations and determine which communities best suit your intended use.

Consider Whether a Condo or House Makes More Sense

Condos can be attractive to buyers considering a second residence or short-term rental because exterior maintenance and common areas are typically managed by the condominium corporation. They can also offer desirable locations and amenities. However, condominium ownership comes with additional considerations. Review condominium fees, financial statements, reserve fund information, bylaws, parking arrangements, building amenities, and any restrictions that could affect your intended use of the property. Detached and attached homes offer different advantages. They may provide additional space, privacy, parking, or flexibility, but owners are generally responsible for more of the property's maintenance.

There isn't one property type that works for every investor. The right choice depends on your budget, intended guest, management plans, and long-term goals.

Look Beyond Short-Term Rental Potential

Even if your primary goal is generating rental income, consider how the property fits into your longer-term real estate strategy. Short-term rental regulations, travel patterns, neighbourhoods, and market conditions can change. A property that makes sense only under one very specific rental scenario may offer less flexibility if your circumstances change. Consider the property's potential appeal to future buyers or long-term tenants as well.

Location, layout, parking, building quality, amenities, and overall resale appeal are still important fundamentals when purchasing real estate.

Do Your Due Diligence Before Making an Offer

Before purchasing a Calgary property with the intention of operating it as a short-term rental, make sure you understand both the property and the requirements associated with your intended use.

Your due diligence may include reviewing:

• Current City of Calgary short-term rental requirements
• Applicable business licensing requirements
• Condominium bylaws and documents, where applicable
• Insurance requirements
• Financing conditions
• Property taxes and condominium fees
• Estimated maintenance and operating expenses
• Property management options
• Comparable rental properties
• Potential vacancy and seasonal demand
• The property's suitability for future resale or alternative uses

Depending on your situation, advice from a mortgage professional, accountant, lawyer, insurance provider, property manager, or other qualified professional may also be appropriate.

Work With a Calgary Real Estate Team

Buying a property for personal use is one thing. Buying a property that may also need to function as a short-term rental requires additional considerations. An experienced local real estate professional can help you compare Calgary neighbourhoods, evaluate different property types, understand current market conditions, and identify properties that align with how you intend to use your investment.

The McKelvie Group is an experienced Calgary real estate team serving local, national, and international clients. Whether you're considering a second residence, investment property, or Calgary property with short-term rental potential, our team can help you understand your options and navigate the purchase process.

Learn more about our buyer services and support or contact The McKelvie Group to begin your Calgary property search.

Frequently Asked Questions About Buying a Short-Term Rental Property in Calgary

Can you buy a property in Calgary to use as an Airbnb?

Properties can be operated as short-term rentals in Calgary when applicable City requirements are met. Buyers should investigate current licensing and regulatory requirements before purchasing a property for this purpose. Condominium properties may also be subject to bylaws that restrict short-term rentals.

Do you need a licence to operate a short-term rental in Calgary?

Yes. The City of Calgary requires short-term rental operators to obtain the appropriate business licence. Requirements differ depending on whether the property is a primary or non-primary residence, and buyers should confirm current requirements directly with the City.

Can you use a Calgary condo as an Airbnb?

It depends on the property. In addition to municipal requirements, a condominium corporation may have bylaws or restrictions affecting short-term rentals. Buyers should review the condominium documents before purchasing if short-term rental use is important to their plans.

How much down payment do you need for an investment property in Calgary?

Down payment and financing requirements depend on factors such as the intended use of the property, property type, purchase price, and the borrower's financial circumstances. A mortgage professional can explain the financing options and requirements applicable to your specific purchase.

What should you look for when buying a short-term rental property?

Consider location, property type, operating expenses, applicable regulations, rental competition, potential vacancy, management requirements, and future resale appeal. A property should make sense within your overall financial and real estate strategy rather than relying solely on projected short-term rental revenue.

Short-term rental regulations, financing requirements, and other rules can change. Information in this article is general in nature and should not be considered legal, financial, tax, or investment advice. Buyers should verify current requirements and obtain professional advice appropriate to their circumstances.