Buying an STR in Colorado Springs?

Question

Hi, I’m looking around to invest in another STR / Nightly rental property. I currently own one in Tennessee and it’s performing great! So I’m looking to venture out west to my favorite state Colorado. I’m looking into Colorado Springs as an option but I’m not sure how strict the area is . Let me know what thoughts you have thanks!

Colin Smith · Answer

Be sure to take note of the recent Colorado Springs STR changes that can be found on the cities website here:

https://coloradosprings.gov/pl...

Erin Spradlin · Answer

@Brandon Bonfiglio - are you open to outlying areas? While Colorado Springs has had some very recent changes around the ordinance, etc. some other cities locally may be interesting to invest in because of where there housing is at right now and/or where it plans to go.

Robin Searle · Answer

@Brandon Bonfiglio - I do STR in the Springs. It's been a bit of a roller coaster with our city council.  Right after we purchased our triplex, they passed the first round of regulation requiring permits and a set of rules to follow (January 2019).  We formed the Colorado Springs Short Term Rental alliance in 2018 in order to advocate for "reasonable" regulation.  No one had an issue with regulation - we just asked to be involved and allow the data to provide the city information over the following year.  One year later, with zero permits revoked for breaking rules and very, very few complaints to the city about STR's, the council decided at random to completely change the rules. No explanation. They stopped allowing any future STR's in R1 zones unless it is your primary residence at least 50% of the year AND there is not another STR within 500 feet of the one you want to start.  All existing owners were grandfathered in.

My property is zoned R4 but can only fit three units due to set back and lot coverage rules, but we are allowed to do up to 4 STR's in a multi-family zone.  If you have an 8-plex, you would be able to do 4 of them as short term for example. Again, as a new owner, you'd have to check that there aren't any other's within 500 feet, even if you purchased multi-family.  Also, if I sell my property, the permits don't go with the property.

So it's difficult to get into now and I would say that as always, it's extremely important to have a back up plan in case the city decides at random again to just shut the whole thing down.  They don't have any explanation for why they keep moving the bar so I don't have any expectation that they won't continue to do so.  There is a link on the Colorado springs.gov page where you can put in an address you are considering to see if there are any other STR's too close by, but again, if it's a single family it has to be your primary. One other caveat, I don't know a single HOA in the city that allows STR's so you can't even think about doing them in a townhome or condo complex.

James Carlson · Answer

@Aaron T.

You should check the ordinance. I know there is language in there addressing military deployments. I don't know about PCSing.

Aaron T. · Answer

I need to go downtown and see If I can get a variance for my R1 and see if I can make it an R2. I dont expect much success, but its worth a shot.

Erin Spradlin · Answer

@Brandon Bonfiglio - I messaged you with a few ideas. Thanks!

Brandon Bonfiglio · Answer

@Erin Spradlin yea for sure anywhere in Colorado reall that would be good to run as an airbnb, do you have any towns in mind?

Aaron T. · Answer

We already BNB half our house, but if we leave town with the military it will become a non-owner occupied. kind of a double edged sword.

James Carlson · Answer

@Aaron T.

Even if you got a variance, if you want to do a short-term rental/Airbnb rental, you need to make sure it's at least 500' from the other nearest non-owner occupied STR.

Now, if you live in the property, the city of Colorado Springs is okay with you doing Airbnb in it, no matter the zoning and no matter the density of other nearby STRs.

James Carlson · Answer

@Brandon Bonfiglio

Robin hit all the points. Just to reiterate, under the new Airbnb laws in Colorado Springs, you can:

• run a non-owner occupied short-term rental (i.e investment STR) in areas zoned R2 and above ONLY IF it it is not within 500' of another non-owner occupied STR.

We are sending a list of homes to the city every week to check on the 500-foot bubble status of them. What we get back is that almost everything is within 500' of another non-owner occupied STR. So the gaps between those bubbles is shrinking and pretty soon, the map will be blotted out with bubbles and make it impossible to start a new Airbnb property.

Buying an STR in Colorado Springs?

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