Airbnb is a lucrative means to achieve real estate income, especially in a tourist destination like Colorado. However, if you are an investor looking to invest in the Denver Metro Area, it’s important to know the local short term rental (STR) regulations. The consequences of blatantly breaking the law are real: In 2019, four investors were arrested and their mugshots plastered all over the internet. Here are the basics you need to know to narrow your real estate investment search.
Some cities like Denver, Golden and Boulder, require the property to be your primary residence (and in some cases also require a license) in order to Airbnb. Short-term rentals are a great way to house hack part of the property while also living in the non-rental space. Renting out a portion of the property as an Airbnb is much more lucrative than a long-term rental and will likely cover your mortgage if not surpass it. Once you move out, you would need to convert the property to a long-term rental to remain compliant with city laws.
Within the Denver Metro Area, there are only three cities that actively allow investment Airbnb properties (or basically non-owner occupied STRs): Wheat Ridge, Arvada, and Littleton. Each municipality differs in its approach. We advise contacting the local planning department for the latest updates. City planning departments view these as experiments with rules that could change. In fact, Littleton is currently planning to restrict the approval process for new airbnb licenses. If you’re looking for an investment property in the Denver Metro area, get advice from your local real estate professional and contact CJV today!