Working with Colorado STR Regulations?

Question

Hey folks,

I'm currently looking to buy a property in the Colorado mountains to use as a STR. However, it'll be my first STR, so I'm a bit skittish - especially about all the regulations I'm seeing. I'm currently looking in Park and Gilpin Counties primarily, but am poking around Clear Creek and Jeffco as well, and I'm wondering how other investors in the latter counties are making it work. Anyone with experience chiming in would be greatly appreciated!

Thanks!

Jimmy Woodard · Answer

@Brice Childers, @James Carlson is the man to speak to

James Carlson · Answer

@Brice Childers

Circling back on this old thread. Did you end up getting a short-term rental in Colorado?

I know a lot of the areas you were considering have changed their regulations since. Gilpin and Clear Creek County have met their cap on non-owner occupied STRs. Jefferson County still technically allows vacation rentals, but damn, they're capricious with their permits and just recently revoked the permit of one of my STR clients' Airbnb for what seems like arbitrary reasons.

Park County, which stretches from a little bit southwest of Denver all the way to just south of Breckenridge, still allows STRs and the cash flow is better there than in some other areas. Grand County allows them but the numbers are ... meh.

I also like Boulder County, which just streamlined their rules.

And Silverthorne, a little north of Breckenridge, also is pretty open to STRs, depending on the area you choose.

Wherever it is, I definitely see a different market than a few years ago. Tightening revenues mean you're cash-flowing here less than you were. There are still decent opportunities, but they look a lot better if your motivation is as much personal use as investment.

Brice Childers · Answer

@Gabriela Rezende definitely looking at Gilpin, but was trying to avoid being directly in/adjacent to Black Hawk / Central City. I'm sure it's profitable, but idk if I wanna deal with the fallout of the clientele who would be attracted to the area.

It would be owner-occupied, but I wouldn't be super happy about having that be a requirement to operate since that would force me into an awkward position if I wanted to use owner-occupied financing in a future purchase.

Jackie P. · Answer

We are currently rehabbing a Gilpin County property.  Would love to chat with any others in that area.  On the hunt for a solid cleaning company now.  Planning to open for business sometime in March 2022.

Steve K. · Answer

@Brice Childers Gilpin still allows STRs for non-owner occ, with a permit and some requirements like having someone on call 24-7 to deal with any complaints, no parties/events without a special use permit, etc. I have a few friends and clients operating them on the north side of Gilpin County/Rollinsville area close to Nederland (which imposed restrictions on STRs in 2019). They’re doing really well catering to the mountain retreat/nomadic worker crowd and skiers coming to Eldora, not so much gamblers from Black Hawk/Central City. Boulder County actually still allows non-owner occ STRs as well, for now, with some restrictions such as limiting the number of nights per year the unit can be rented. I have one in Boulder County that I set up for short term but ended up renting it long term at the same rate I would have as an STR because my very first tenant decided to stay a year and offered to pay full rate. Demand is super high in this area, partially due to low inventory which has turned many potential buyers into renters until they can find something (like my tenant I just mentioned who is planning to purchase but renting from us while he shops). Inventory is super low and finding a suitable property will likely be your biggest challenge. I know the area well and recently went through the process of setting up an STR myself if you want to chat.

Gabriela Rezende · Answer

Well your in luck - Gilpin is very STR friendly, also profitable & doesn’t have owner occupancy restrictions. It also sounds like you have a pretty good plan. If you’d like to see property options or dig deeper into the current airbnb research/numbers we can hop on a call sometime this week 👍🏼 lmk

Gabriela Rezende · Answer

There are some great STR opportunities in the mountains but definitely important to keep an eye on city/county regulations. I’ve had a few clients close recently on properties in Black Hawk/Gilpin County and the income numbers there are fantastic, Gilpin is also quite friendly toward STR investment properties. We love Park County and Clear Creek County as well - we have a few clients doing $10k+ gross per month on STR investment properties in Clear Creek.

Airdna is a great resource for occupancy/income estimates in the mountains.

Are you planning on living in the property and renting out a portion (basement/ADU), or will this be a full-time investment property? The areas available to you can differ significantly based on how you plan to purchase the property. Feel free to reach out!

Ryan Thomson · Answer

Hi @Brice Childers. I have done a lot of research on different counties and cities in Colorado. I also want to get an airbnb in mountains. Thre is still a lot of opportunity despite some tightening of the rules and some moratoriums. Happy to connect and share my airbnb research as well.

Working with Colorado STR Regulations?

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