All Forum Posts by: James Carlson

Thanks for posting @Curt Riffel

I'm torn, @Peter S. , between wanting Amazon to come to Denver and thinking we already can't manage our current growth. The potential negatives and positives aren't anything new. The city's existing housing problems would be amplified. Higher rents, higher property values, higher competition for an already tight inventory. But we'd also broaden our tax base that would hopefully help improve our schools and roads and other infrastructure. There's also the prestige of having that headquarters that might draw a lot of other investment.

I think what you think about the potential HQ2 also depends on how secure you feel with your current position. Do you already own? Do you have a good-paying job? There will be winners and losers, and those that don't get the benefits will likely face tough questions about whether they can continue to live here. 

It's back! The never-gets-old, sure-to-inspire-rancor question: Airbnb vs. VRBO??? Aaaannnd... FIGHT!

As others have said, it's not one or the other. It just depends. For me? The Airbnb platform is hands-down more user-friendly. VRBO is like using Yahoo. I mean, you can find some search results, but it's clunky and you've got this other thing over here called Google that works waaaay better. But that's just my opinion. 

There is the thought that VRBO tends to skew more toward vacation destinations -- think, beach condo or mountain home -- and Airbnb skews toward urban settings. I know that here in Denver, Airbnb kicks VRBO's butt, but in the ski towns, it's the reverse. I would think in Portland, Airbnb rules the roost, but I don't know that market well.

In the end, use what works! If it makes you the money you're happy with, then stick with it.

@Liz Weiss

Great question. (And I appreciate @Alex M. know something about that in Waikiki and that it will be tough to rely on a stable regulatory environment there. 

Colorado Springs has said they welcome STRs and the conservative nature of their government (i.e. do with my property what I want) makes me think that's not going to change. 

It sounds like maybe you could get better returns in Hawaii; the question is just how long that would last. It's a fun decision to get to make. Good luck! 

@Jenelle H.

Absolutely a good idea! And as you've laid it out, the current proposal before city council in L.A. would likely allow her to do it.

I'm here in Denver but am a bit of a dork about Airbnb laws. L.A. doesn't currently have anything restricting short-term rentals, but they're likely passing something early this year. 

The current proposal in Los Angeles would allow your sister to rent her place for up to 180 days a year as long as it's considered her primary residence. The ordinance defines a primary residence as a place in which she lives at least 6 months of the year. Now, are they going to check if she actually only lives there four months of the year? Probably not, but if she's planning on only visiting for a few weeks every couple months and renting out the place the rest of the time on Airbnb, the city might frown on that.

I'll leave the question of how much she could make up to others who know that local short-term rental market better. You can check yourself. Maybe buy AirDNA's report on L.A. Or just do the research yourself on Airbnb, zooming in to the area where your sister lives and seeing what other similar places are charging and how often they're booked. 

Good luck!

@Ram Srinivasan

As @Tyler Work said, it's absolutely a viable investment strategy. I work with clients who are buying in Denver and Colorado Springs exclusively for Airbnb. (Denver's a bit harder because of the rules.) But I know people are doing it around the country.

As with any investment, it's all about the numbers. Most major cities are going to have at least one (if not multiple) companies that specialize in short-term rental management. For full-service, that will usually run you 15% on the low end and up to 25%. (In the mountain towns here in Colorado, that fee can go up to 40%.) That all sounds like a lot, but you've got to remember that in general you are also get 2-3x the revenue of a traditional long-term rental. If you want to run it yourself, then you don't have to include that fee, but I would bet self-management only lasts so long before you tire of cleaning, laundering, answering daily questions, etc.

As for the risks ... there is always a small risk that someone trashes your place, but that's true for long-term tenants as well. The biggest issue I'd watch for is a changing regulatory environment in the city where you buy. City laws and ordinances are being discussed everywhere if they haven't already been passed. It's important that you know what you can and can't do (and what may change with that) before investing.

Hey @Jason Henning

Sorry for the delay on this. Technically, you can do what you're asking, but logistically it will likely be too much work. The city of Denver would allow you to rent one place or the other, and you could switch the license back and forth, as long as they're both on the same property (all considered part of your "primary residence.") The issue is that you can't really have both listings up at the same time, as @Tyler Work said. So you'd have to put one up when you want to rent it and then take it down and put the other up. That would A) be a pain in the *** and B) seriously limit the exposure of each unit.

Also, while your zoning can allow for two units, U-TU-C has a bigger lot size requirement than the other "TU" zoning. It has a minimum 5,500sf lot. I've encountered a fair number of lots zoned for U-TU-C, and I get excited for my clients only to realize the lot is 4,000 or some such. So check that out as well. (Those are the rules; Now, if you've got an existing garden level that's been rented forever, you're more than likely fine doing what you're doing.)

Great idea all around though, and I hope you find a way to do it. 

Thanks for the shout outs. I'm out of the country with poor internet and not enoughtime to fully respond. 

@jason henning Ill PM you when i return.

@Matt M. Thanks for the mention. Sorry for the delay. I've been hanging with family and am about to board a plan to Bogota. 

@Alex Bockey Let me preface all of this by saying that what you can get away with right now and what is actually allowed under the law are not the same. 

Most definitely what you describe is not allowed with Airbnb in Denver, at least according to conversations with the excise and license department worker who oversees short-term rentals in Denver. Also, just reading through the 10 complaints the city attorney's office has filed shows that it doesn't allow what you're talking about 

I know a lot of people are doing what you're doing, and while I don't disagree with @Luke Carl that its better for the image of other hosts if you do it right, I'm not judging at all. My wife and I did the same thing years ago in Denver. My understanding of  what you want to do is get landlord's permission, obtain a license, and pay the taxes, right? That's all good. 

The problem is it's still not your primary residence. The city is not actively enforcing the PR rule, but rather relying on neighbor complaints. If a neighbor reports you to the city, saying that you do not actually live there as your primary residence, then the fact that you have a note from your landlord giving you permission will not matter to the city attorney. All the Denver city attorney cares about is what the law says, and a primary residence under the law is "a usual place of return for housing as documented by ..." and then they list a bunch of documents such as drivers license, voter registration, vehicle registration, etc. The city has made clear that they can ask for any further documents they want to satisfy the requirement. In some cases, they're asking for tax returns. They've also made clear you can only have 1 primary residence.

There have been 10 cases so far about the primary residence rule. Nearly all of the hosts have agreed to pay a fine and relinquish their STR license. In these instances, the city attorney relied on the neighbors' affidavit statement and then pushed the hosts for documentation. 

I applaud the creative thinking and don't mean to discourage you one way or the other. Just know what you're getting into. 

And yes, as @Tyler Work said, it's kind of odd that they're even doing this audit as Denver's compliance rate is higher than most any other major city. The auditor seemed more keen on ensuring the city is keeping accurate data and requiring documentation. 

If I were @Craig Curelop , I wouldn't worry too much. (Also if I were Craig Curelop, I'd be rolling in the money! Have you seen what that guy is doing with Airbnb and house hacking in Denver?)

@Account Closed Thanks for sharing. 

First off, the obligatory disclaimer: I am not a lawyer, and this isn't legal advice. Whew! Got that out of the way.

My big thought after reading the report is that whether you're doing Airbnb in Denver within the law or if you're skirting the primary residence rule, this doesn't change much about how you can operate or the potential risks. Here's why I think that:

If you're doing things right, this audit won't affect you. The auditor is urging the city to require more documentation during the application period. This might be proof of insurance and proof of possession. (i.e., proof that you own the property or proof that, if you're a tenant, that your landlord has given you permission.) Notice that I didn't say "proof of primary residence." So if you're doing things right, then you'll be able to provide these docs should they ask.

If you're NOT doing things right. If you don't have a license, I can't help you. Just get a license and pay the STR lodger's tax. But I'm talking about people who are Airbnbing a Denver place that's not their primary residence. (Ex: Spouses who each have a "primary residence." Someone claiming a "primary residence" when you're really staying full-time elsewhere. Master leasing a property with landlord permission to Airbnb full-time even though you're never there. Etc.)

It noted that some people -- 20 noted in the report -- violated the primary residence rule by having the same license registered at two addresses (dumb!) But that's a problem easily circumvented by crafty people. 

In the end, for those of you violating Denver's primary residence rule for Airbnb -- I know you're out there! -- the biggest risk remains the same. It's NOT the city actively finding you. It's still all about neighbor complaints. Each of the 10 "show-cause" hearings that has stripped someone of their license due to a primary residence rule violation resulted because of a neighbor complaint. Keep your neighbors happy, you stay in business.