If you're an investor in Denver or Colorado Springs or any other Front Range city, you're seeing dollar signs. But how you go about buying and setting up an Airbnb investment property differs depending on where you live.
That's especially true when the laws are changing city to city. For instance, Colorado Springs had allowed Airbnb investment properties, but in late 2019, they limited those. And in August 2020, Arvada, which had not allowed them at all, changed to allow you buy up to three short-term rentals.
Be aware: This page was last updated on Aug. 17, 2020.
(Download our reports to learn what you can and cannot do with Airbnb in numerous Front Range cities.)
Here are strategies depending on where you live.
Buying an Airbnb investment property in Denver can be difficult. Denver's Airbnb law restricts short-term rentals to only your primary residence. (And as of August 2020, the city had filed felony charges against four Airbnb hosts who were running short-term rentals in properties that weren't their primary residence. So be sure to consult with someone -- hint, hint: Us here at Erin + James Real Estate.)
But the Denver Airbnb law does allow owner-occupiers to rent out a separate space on their property as much as they want. So we work with a lot of clients to find properties with a basement apartment or a carriage house out back that gives you a full Airbnb rental while retaining the privacy of your own space.
With an Airbnb investment property like this, you can live mortgage free or close to it. So you get a new home and a rental that will cover much if not all of your mortgage.
There is not an easy way to search for homes on the MLS with ready-to-go separate spaces with a kitchen and bathroom. We have developed a number of searches that capture these units. Reach out today if you're interested.
Up until late 2019, Colorado Springs provided a great investment opportunity. Unlike Denver, Colorado Springs did not have the primary residence rule and in fact, the city had passed an ordinance specifically allowing for Airbnb and VRBO in any kind of investment property.
That changed in December 2019. Now, the current law allows you to rent on Airbnb anywhere in the city if it's your primary residence. But if you want an Airbnb investment property in Colorado Springs, the rules have tightened:
The property has be zoned R2 or some other multi-family zoning; and
It has to be outside of a 500' bubble from any other non-owner occupied STR. (There can be as many primary residence Airbnbs near you. You just can't have another investment Airbnb near you.)
(Check out the Colorado Springs Airbnb laws report for more info.)
Once a new law goes into effect on Oct. 31, 2020, Arvada will have legal Airbnb investment properties. Here's what the law will allow you to do with STRs:
Own and operate up to three Airbnb properties, whether primary residence or not.
Rent each unit up to 240 nights a year on Airbnb.
Rent only one unit in a duplex or other multi-unit as a short-term rental
Colorado's mountain towns like Winter Park, Vail, Aspen, Steamboat Springs, Breckenridge, Keystone, etc. tend to be open to Airbnb investment properties. This makes sense as short-term rentals are their bread and butter. With many of the towns, however, they restrict the areas in which you can do it and prohibit it in other areas that they want to retain for affordable housing.