Colorado short term rental market
Rental Property Investor · Long Beach, CA · Member since 2018 · 6 posts · 3 votes
I’m looking to invest in a short term rental (air bnb) in the State of Colorado. Looking for advice & input on specific markets. Currently comparing Boulder vs. Denver vs. Estes park vs. Colorado Springs.
Anyone know which of these cities have the best earning potential, which attracts the most tourist. Pros & cons of investing in any of these areas?
Any information is appreciated.
Hi @Frederick Wofford jr! I would mirror what @Tara Rose Iguidbashian said above. The city of Denver only allows STR in primary residences, and also they need to be licensed and permitted. You will want to keep an eye on most cities around Colorado as a lot of them have similar or pretty strict regulations. Boulder also requires licensing and permits for STR, and if it is run as a Vacation rental (rented for more than 60 days out of the year) it can be pretty tough! Estes Park has similar licensing laws and they will be property specific if they can be obtained or not, Colorado Springs is zoning specific as well.
However, if Denver is the market that you want to be in I would look into some of the surrounding cities, primarily Arvada, and Wheat Ridge are a good bet, both of these allow STR as investment properties (and Arvada doesn't require licensing). Littleton currently allows them as well, but they are in the process of possibly reversing that decision. I know a lot of clients and teammates that do well in these areas with STRs. You will get a lot of mixed visitors, from business travel to relocating, to tourists.
Happy to help out any other way! Otherwise good luck!
Exciting Frederick! One note about short-term rentals in Denver, in order to rent out a property for STR (1-29 days) it must be your primary residence. But! Some of my clients have done well with LTR or even 30-90 day rentals for traveling nurses or other people who need temporary housing.
Hi @Frederick Wofford jr! I would mirror what @Tara Rose Iguidbashian said above. The city of Denver only allows STR in primary residences, and also they need to be licensed and permitted. You will want to keep an eye on most cities around Colorado as a lot of them have similar or pretty strict regulations. Boulder also requires licensing and permits for STR, and if it is run as a Vacation rental (rented for more than 60 days out of the year) it can be pretty tough! Estes Park has similar licensing laws and they will be property specific if they can be obtained or not, Colorado Springs is zoning specific as well.
However, if Denver is the market that you want to be in I would look into some of the surrounding cities, primarily Arvada, and Wheat Ridge are a good bet, both of these allow STR as investment properties (and Arvada doesn't require licensing). Littleton currently allows them as well, but they are in the process of possibly reversing that decision. I know a lot of clients and teammates that do well in these areas with STRs. You will get a lot of mixed visitors, from business travel to relocating, to tourists.
Happy to help out any other way! Otherwise good luck!
I can speak for the Estes Park market as being very competitive to find a suitable rental. However, we also have over 4 million visitors coming through estes park to get to Rocky Mountain National Park every year. The rental regulations are restrictive but not impossible. Happy to help with more resources when the need arises.
@Frederick Wofford jr I have a STR Property Management Company Headquartered out of Colorado Springs so I like to think i've got a good grasp on the COS market which is very strong. I actually ran the numbers on COS compared to Denver and and some other cities like Ft Collins and Estes Park. The Estes Park numbers were very strong but the entry prices were so high that it didn't make sense entering that market. I use Market Growth, Average Daily Rate, Occupancy, and Average Monthly Revenue for my analysis.
COS has the lowest entry price (Market Growth) with the 2nd best average returns and the highest average Occupancy.
Hope this helps!
STR revenue potential is only half the equation as some of the highest-earning markets are also the markets with higher home values.
Good luck!
Hi @Frederick Wofford jr! I would mirror what @Tara Rose Iguidbashian said above. The city of Denver only allows STR in primary residences, and also they need to be licensed and permitted. You will want to keep an eye on most cities around Colorado as a lot of them have similar or pretty strict regulations. Boulder also requires licensing and permits for STR, and if it is run as a Vacation rental (rented for more than 60 days out of the year) it can be pretty tough! Estes Park has similar licensing laws and they will be property specific if they can be obtained or not, Colorado Springs is zoning specific as well.
However, if Denver is the market that you want to be in I would look into some of the surrounding cities, primarily Arvada, and Wheat Ridge are a good bet, both of these allow STR as investment properties (and Arvada doesn't require licensing). Littleton currently allows them as well, but they are in the process of possibly reversing that decision. I know a lot of clients and teammates that do well in these areas with STRs. You will get a lot of mixed visitors, from business travel to relocating, to tourists.
Happy to help out any other way! Otherwise good luck!
Which mountain/ski towns allow STR?
Did a loan recently on a turnkey acquisition of a lakefront STR in Grand Lake, CO. I checked in with the borrower a couple of months after he acquired the property and so far he said the property's killing it.
We own a lakefront STR condo in Dillon (Summit County) that is within 15-20 minutes of 5 ski resorts. Summit County and most of the towns within allow STRs but are all tightening up their STR restrictions (there were none when we first started renting in 2012). But, it is still possible. Just be sure to do your research so that you have a clear picture of what you are getting into if you should decide to proceed.
Hi @Frederick Wofford jr! I would mirror what @Tara Rose Iguidbashian said above. The city of Denver only allows STR in primary residences, and also they need to be licensed and permitted. You will want to keep an eye on most cities around Colorado as a lot of them have similar or pretty strict regulations. Boulder also requires licensing and permits for STR, and if it is run as a Vacation rental (rented for more than 60 days out of the year) it can be pretty tough! Estes Park has similar licensing laws and they will be property specific if they can be obtained or not, Colorado Springs is zoning specific as well.
However, if Denver is the market that you want to be in I would look into some of the surrounding cities, primarily Arvada, and Wheat Ridge are a good bet, both of these allow STR as investment properties (and Arvada doesn't require licensing). Littleton currently allows them as well, but they are in the process of possibly reversing that decision. I know a lot of clients and teammates that do well in these areas with STRs. You will get a lot of mixed visitors, from business travel to relocating, to tourists.
Happy to help out any other way! Otherwise good luck!
Which mountain/ski towns allow STR?
As far as mountain areas that are STR friendly, Park county (Bailey, Fairplay, Alma, etc.) is friendly and sees good cash flow in some towns. Grand county (e.g. Fraser and Granby) is friendly but cash flow can be tougher than other mountain areas. Unincorpoated Jefferson county (Evergreen area) allows STRs but they have very stringent licensing requirements and it typically take 2-4 months to get licensed.
For ski towns, Silverthorne, Dillon, Blue River, Breckenridge, Keystone, Beaver Creek, Aspen, and Vail are all have certain areas and zones that are friendly.
The regulations are frequently changing so definitely do your due diligence! Happy to drill down into more detail if a certain county/town interests you!