In many markets across the country, including Denver, the short-term rental (STR) strategy for investors is gaining popularity due to the huge cash flow it can generate. If you are considering adding this strategy to your repertoire, here are a few pros and cons to consider.

Pros:

- Cash flow: STRs generate more than double the cash flow of long-term rentals, on average. In the Denver market in particular, rising home prices are making it increasingly difficult to cash flow. STRs are a great option to remain profitable. 

- Not as much ongoing work as most people think: We typically spend 1-2 hours per week managing our 3 AirBnb units. This includes communicating with guests, coordinating with cleaners and performing any maintenance tasks we have not yet hired out (restocking supplies, minor repairs, etc.).

-Well-maintained property: With guests staying for 4 nights on average, a cleaning crew will come in several times a month. In contrast to long-term rentals in which you primarily rely on tenants to keep the unit clean, the quick turnover of STRs ensures the unit is being cleaned frequently.

    Cons:

    - More upfront time and money: The actual hours and dollars required to set up an AirBnb vary based on the unit’s size and the level of luxury you would like to offer; yet it cannot be ignored that furnishing a unit takes a considerable amount of time and money at the outset.

    - Management time: The time allotted for managing your STR property(s) can also vary greatly based on whether you have outsourced each task required. It can be as simple as coordinating landscapers, cleaners and handymen, or performing each of those tasks yourself. As you build your STR portfolio, hiring these tasks out is the best way to go to truly generate passive income.

    - City/County Restrictions: If you are not living in the STR property as your primary residence (i.e. "house hacking"), there are a limited number of cities in the Denver area that allow STRs.

    - Risk of STR rules changing: While several cities in the Denver area have legislation in place that allows for STRs, these rules are always subject to change. Wise investors will have an exit strategy such as converting to a long-term rental.

    If you have any questions about STR investing, please don't hesitate to reach out!