I'm looking to turn my first house into an income generating property and am weighing the benefits of LTR versus a blend for STR/MTR in Denver. From my research so far and conversations with a couple property managers it sounds like there is more upside on the STR/MTR side of things however it doesn't seem like Denver's government is very friendly to the STR/MTR option.
I'd love to hear some thoughts and opinions on STR/MTR versus LTR for Denver. To clarify for either option I will go with a full tilt property manager because I will not make enough time to run all of the operations on the property so I'm open to recommendations there too.
A couple thoughts on your potential STR/MTR in Denver:
-- There's a hard distinction between STR and MTR in the eyes of Denver city government. Short-term rental is any rental less than 30 days and is subject to the primary residence rule and require a permit. A medium-term rental is any rental of 30 days or longer and is treated the exact same as a long-term rental. It might as well be a 12-month lease, in the eyes of the city. It's all the same.
-- Are you in the actual city of Denver? (Not like a suburb or unincorporated Adams County or something?) The city of Denver requires any Airbnb-like STR to be in your primary residence, and they're pretty good at enforcing that rule.
-- When did you buy your house? Do you have a low interest rate on it? I ask because what I see with my Airbnb-investor clients in Colorado is that if you're buying right now -- with today's rates and somewhat dampened STR revenues -- you're only making money if you self-manage. An STR property manager is going to take at least 25%, and any cash flow is gone at that point.
At this point, a self-managed MTR makes more than an STR managed by a company. I'd even consider an LTR because it sounds like you don't want to put much effort into it.
Real Estate Agent · Denver · Member since 2020 · 366 posts · 151 votes
2y
@Elliott Beckstrom, an STR/MTR can generate more income than a LTR, if you set it up right! Will you still be living in the home? City of Denver requires you be a primary residence to STR the property. Property managers for STRs are typically 25% of your income, you can set it up to be fairly passive if you find a good cleaner and set up your systems. I'd be happy to chat with you more about it!
A couple thoughts on your potential STR/MTR in Denver:
-- There's a hard distinction between STR and MTR in the eyes of Denver city government. Short-term rental is any rental less than 30 days and is subject to the primary residence rule and require a permit. A medium-term rental is any rental of 30 days or longer and is treated the exact same as a long-term rental. It might as well be a 12-month lease, in the eyes of the city. It's all the same.
-- Are you in the actual city of Denver? (Not like a suburb or unincorporated Adams County or something?) The city of Denver requires any Airbnb-like STR to be in your primary residence, and they're pretty good at enforcing that rule.
-- When did you buy your house? Do you have a low interest rate on it? I ask because what I see with my Airbnb-investor clients in Colorado is that if you're buying right now -- with today's rates and somewhat dampened STR revenues -- you're only making money if you self-manage. An STR property manager is going to take at least 25%, and any cash flow is gone at that point.
At this point, a self-managed MTR makes more than an STR managed by a company. I'd even consider an LTR because it sounds like you don't want to put much effort into it.
Lender · Austin, TX · Member since 2021 · 448 posts · 441 votes
2y
Pros and cons to both: STR/MTR is more work, but normally, there is a higher return and higher risk, and LTR is less work and has a lower return and lower risk. It mainly depends on your personal risk tolerance.
I'm looking to turn my first house into an income generating property and am weighing the benefits of LTR versus a blend for STR/MTR in Denver. From my research so far and conversations with a couple property managers it sounds like there is more upside on the STR/MTR side of things however it doesn't seem like Denver's government is very friendly to the STR/MTR option.
I'd love to hear some thoughts and opinions on STR/MTR versus LTR for Denver. To clarify for either option I will go with a full tilt property manager because I will not make enough time to run all of the operations on the property so I'm open to recommendations there too.
Please let me know!
Thank you,
There are great answers to your question here already! With MTR there are places where you can market to traveling nurses and medical professionals who are looking for something furnished for 1-6 months. Not as profitable as a well run STR but much less work and lower expenses. If you want to find a STR manager that's not going to take all your profits, you can use a company like Evolve, which is actually based in Denver and happens to be one of the largest in the business.
Just want to reiterate what others have said here though. You can only do STR with your primary residence, which is why some people of the MTR route. If your property is within a short drive from a major hospital, you could have consistent bookings. Traveling nurses typically book a few week to even a couple of months out.
Just circling back on this to see if you decided which direction you're going with your property.
Thank you for the help! Yes I'm in the City and County of Denver so with the primary residence requirement the STR won't work for me. I have a 3% rate locked in from 2021 so the LTR numbers will still cashflow so I'm going that route to start and that's the route I'm going to go.