Hello, I am selling my primary residence in Portland, ME and am looking to buy a house in Denver, CO. My plan is to live in this house for about a year before turning it into a short term rental and buying another primary residence. I have a couple of questions... Are short term rentals a good idea in Denver? What areas of Denver should I stay away from?
Does anyone have a nice single family or potentially a condo in the greater Denver area for < $450,000 that could also work for STR purposes?
Adding to my own thread.. If people have recommendations for areas that do NOT require the STR to be your primary residence that would be preferred. Also, if people have advice on condo's in Denver.. Do most HOA's disallow STR's?
Take a look at Arvada, Littleton, and Wheat Ridge. Those are the municipalities in the Denver area that don't have the primary residence rule. Of those, Wheat Ridge would be my preference due to its proximity to downtown Denver and Highland. They are capping the number of STR licenses they're issuing though, so you'd probably want to move on that sooner rather than later. In Arvada or Littleton, I would look for something close to their downtowns and lightrail stations.
As far as condos, most HOAs I've come across in the area don't allow nightly rentals.
@Damian Cummings If you are goal is short-term rentals, I would avoid condos and townhomes since those are govern by HOAs, and 99% of them don't allow short-term renting like Airbnb.
Denver allows short-term rentals, but only as a primary, so once you move out, you couldn't Airbnb the basement anymore.
Like @Kevin Smith said, Arvada, Littleton and Wheat Ridge allow short-term rentals as investment properties, but who knows how long that will last, so it would be wise to focus on those areas if you goal is short-term renting investing.
I have two rentals in Arvada and short-term rent my own house while traveling. It's a great market for both LTR & STR I've found, although I don't do the STR for income, just supplements my COL. And the STR slows in winter (at least it did 2 years ago). Definitely would talk to other investors who have bought with something a STR in mind.
Good luck with the move!!
@Catie Lawrence oh and you can only STR it 240 days a year…
@Kevin Smith very helpful thank you so much man
Hey @Damian Cummings !
What is your reasoning behind wanting to stick with STR? The only reason I ask is that as you've heard from others the STR market is a bit of an uncertain maneuver and does bottleneck (most times) into a single strategy. I don't want to discourage you from doing it, and it can be a lucrative endeavor, but I would make sure the properties you do look at will work in other ways, in case things change with regulations.
The step down from STR that I personally love is medium-term, or executive rentals. The typical one is renting to travel nurses, you still get a premium on rent, and you avoid STR regulations as they are longer than 30 days. So you aren't pigeonholed into what properties you can buy, as you open up townhomes and condos as the HOAs won't care. Also opens up locations, as you don't have to worry about the city ordinances.
If you want to maximize your earning potential and lessen your COL when you move out here, I would also suggest looking for single-family residences with a separate living space, or mother in law suite that you could Airbnb, or medium-term rent while you occupy. Then when you move out you can rent both areas and increase your cash flow.
STR can be a great strategy here in the Denver area, but over the last years it's getting tougher and tougher, so it is just best practice to make sure that you have a backup, and a backup for your backup in case things change.
@Ben Rhodin very helpful insight, and I appreciate the perspective. I love the idea of medium-term rentals of 30 or so days, I think that definitely could work. Is there a separate platform / website specifically for advertising to that market or just FB marketplace and the normal sites?
@Damian Cummings , the most popular website for these medium-term rentals is FurnishedFinder, or Airbnb still.
@Ben Rhodin thank you! Enjoy the weekend man