4 bedroom property in Dillon, CO

12 Replies

We have the opportunity to buy a 4 br, 3.5 bath home in Dillon. It wouldn't be a deal price-wise, but we'd save realtor fees as it'd be a private sale. I'm struggling with figuring out whether it would be viable as a STR (AirBnB or VRBO) due to variable rental rates and demand throughout the year. From my initial research I think I'd have to keep it rented about 70% of the time at an average nightly rental but that seems like a lot (without any data to back that feeling up). The location is prime and it's in good condition. And of course we'd like the option to use it ourselves from time to time which would be hard if we actually manage to keep it rented 70+% of the time.

The layout would also lend itself quite easily to splitting into two 2BR units with the option to rent one or the other or the whole house but that wouldn't be something we'd do up front.  

Thoughts?

I'd make sure to check the local regs on STRs. I think you're subject to hotel tax and there may be other restrictions depending on the neighborhood.  But, there's also a huge lack of LTRs/local housing with good seasonal and year round potential, especially if you split it into two units. 

I've pulled the Airbnb laws for Denver and different mountain communities related to short-term rentals. I would check to see which city or area it falls under and call the city planner. You want to make sure that the property is in an area zoned for STRs. Mountain towns tend to be pretty friendly, but they have certain zones where you have to have longer rents to help keep it affordable for seasonal workers. 

Erin Spradlin, Real Estate Agent in Colorado (#230019690)

I'd think that would make a pretty good short term rental.  More so in the winter, with four ski areas close by, but in the summer, too.  It is a house or a condo?   I'd check with the city about your ability to split it in two.  Sewer can be an issue when you add the second kitchen.  Is it convenient to the bus?  Any occupancy limits?  I.E., number of unrelated persons limit like in some areas.  If not, you might also be able to do a seasonal rental by the room.  To ski area workers, for example.

My client cleared $90k his first year STR in Breck. He self manages, and saves the 35%+ management fees. Who is going to run it for you?

70% of the time seems high, unless you lower your fees. I'd rent the entire unit and not split it up. 

I'd be interested as a buyer if you pass. Depending on price, I'm open to paying a finders fee. 

Originally posted by @Erin Spradlin :

I've pulled the Airbnb laws for Denver and different mountain communities related to short-term rentals. I would check to see which city or area it falls under and call the city planner. You want to make sure that the property is in an area zoned for STRs. Mountain towns tend to be pretty friendly, but they have certain zones where you have to have longer rents to help keep it affordable for seasonal workers. 

Thanks.  I'll make a call soon to check on those things. 

Originally posted by @Matt M. :

My client cleared $90k his first year STR in Breck. He self manages, and saves the 35%+ management fees. Who is going to run it for you?

70% of the time seems high, unless you lower your fees. I'd rent the entire unit and not split it up. 

I'd be interested as a buyer if you pass. Depending on price, I'm open to paying a finders fee. 

Thanks.  It's early stages yet and we're still exploring the options.  We are in Denver, so it's close enough we could try to do it ourselves, but were going to look into seeing if we can find a manager willing to handle overseeing the turnover(cleaning)/maintenance calls for a reduced fee if we handle the actual booking end of things so I don't have to drive up the mountain all the time to check on stuff and make sure it's being handled.  I agree with you about keeping it whole and rent at a higher rate vs. splitting it and risking only filling half the property on a regular basis which would make it difficult to cash flow.  

I tried to find listing in the area available as a LTR but everything was 2BR or less so I have no idea what the rent on a 4 BR 3.5 BA would run up there.

Originally posted by @Jon Holdman :

I'd think that would make a pretty good short term rental.  More so in the winter, with four ski areas close by, but in the summer, too.  It is a house or a condo?   I'd check with the city about your ability to split it in two.  Sewer can be an issue when you add the second kitchen.  Is it convenient to the bus?  Any occupancy limits?  I.E., number of unrelated persons limit like in some areas.  If not, you might also be able to do a seasonal rental by the room.  To ski area workers, for example.

It's a house.  Those are good things to check on too.  Thanks for the feedback.

Hi-I live full time in Summit County and a Realtor and property manager up here. Is the property down in the valley or up near the lake. Long term rental rates vary greatly depending on where the house is. 

@Jennifer Delmore sorry I'm a bit late to this post. @Garry C. does short term rentals in Winter Park. Based on what he has told me, you need to find someone to "manage" the property local who is more a property person (cleans and makes ready) and not an official "property manager". There is no reason to have a licensed real estate person do you short term rentals. The law does not require it and you can set it all up so they don't touch the money. In the age to technology everything can be handled with email, texts and pictures etc. I'm sure Garry would be happy to share the nitty gritty of his approach if you buy him a beer at the next meetup. 

Pricing is key. I know that @James Carlson has some good ideas on that. If you are interested you should definitely attend one of his and @Erin Spradlin 's meetups on STR. The mountains are a bit different but you can adapt.

Originally posted by @Bill S. :

@Jennifer Delmore sorry I'm a bit late to this post. @Garry C. does short term rentals in Winter Park. Based on what he has told me, you need to find someone to "manage" the property local who is more a property person (cleans and makes ready) and not an official "property manager". There is no reason to have a licensed real estate person do you short term rentals. The law does not require it and you can set it all up so they don't touch the money. In the age to technology everything can be handled with email, texts and pictures etc. I'm sure Garry would be happy to share the nitty gritty of his approach if you buy him a beer at the next meetup. 

Pricing is key. I know that @James Carlson has some good ideas on that. If you are interested you should definitely attend one of his and @Erin Spradlin 's meetups on STR. The mountains are a bit different but you can adapt.

Thanks for the response. I'll keep an eye out for a STR meet up opportunity. :) I saw a meetup scheduled in Littleton on Tuesday that my husband and I are planning to attend and meet some people. And, I hadn't thought about it, but I have family up there that might be willing to oversee some of the turnover/make ready stuff for me for a smaller fee than a full rental realtor.

Thanks for the mention @Bill S.

@Jennifer Delmore , that Littleton meetup sounds like the one that @Bryan O. and I host. I hope to see you there. We can definitely talk more about it in person.

I would be careful of deals that aren't deals. Unless you're buying it for yourself regardless, and are just hoping to recoup some money in the meantime. But if you want it to be a viable investment, the numbers need to work. And you should have an exit strategy in case things change after you get into it.

My first one started out as an "I'm going to mostly use it myself, and retire there, but I'll make some money when I'm not there." I hardly ever use it myself though. I do, but it's not often. And even then it's usually during the week or slow season when it's not already rented.

If you can split it into two (physically and legally), why wouldn't you? It shouldn't be a 'permanent split'. If you have doors between that lock from both sides, now you've got two 2BR rentals and one 4BR. Obviously you can't always rent them at once... but I think you'll find the 2BRs to be more popular, with the occasional request for a 4BR. And then, you'll want to screen carefully. If it's not a large family, it's likely a group of party people.

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