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How to Buy a Short Term Rental Property in Colorado
29 January 2025 By Brett Johnson
Buying an Airbnb Investment Property in Colorado
If you want learn how to buy a short term rental property in Colorado to diversify your investment portfolio or generate passive income, buying a short term rental property in Colorado can be a lucrative opportunity. With its stunning mountain scenery, vibrant cities, and year-round tourism, Colorado is one of the most desirable states for short term rentals. This guide will walk you through the essentials of buying, managing, and even selling a short term rental in Colorado.
What is a Short Term Rental (Airbnb) Property?
A short term rental property in Colroado is a home or apartment rented to guests for a few days or weeks, usually through sites like Airbnb or Vrbo. These rentals give travelers a flexible and unique place to stay instead of a hotel. In Colorado, short-term rentals include cozy cabins, luxury condos, city apartments, and large vacation homes. Places near ski resorts, national parks, and big cities are especially popular.
How to Buy a Short Term Rental Property in Colorado
It’s important to learn how to buy a short term rental property in Colorado if you want to be profitable. Below are some key steps:
Set Your Budget Determine your budget by considering the down payment, closing costs, potential renovations, and furnishing expenses. Note that many lenders require a higher down payment for investment properties—typically 20-25%.
Research Local Regulations Colorado’s short-term rental market is regulated at the city and county levels. For example, Denver and Boulder have strict rules, including licensing requirements and rental duration limits. Some areas may require you to live on-site or prohibit non-owner-occupied rentals altogether. Always check local zoning laws and HOA rules before purchasing.
Get Pre-Approved for Financing Investment property loans often come with higher interest rates, so shop around for lenders familiar with short-term rental investments. Pre-approval will also help you understand your purchasing power.
Choose the Right Location Select a location that aligns with travelers’ preferences. Areas near ski resorts, hiking trails, or major events tend to have high occupancy rates. Evaluate local amenities, accessibility, and the potential for year-round demand.
Work with Local Experts Collaborate with a local real estate agent experienced in short-term rental properties in Colorado. They can help you navigate the market, identify lucrative opportunities, and assess potential returns on investment.
Colorado Short Term Rental Regulations and Laws
Buying an Airbnb property in Colorado? First, make sure you understand local rules. You’ll need the right licenses and permits, plus a handle on taxes, insurance, and occupancy limits to avoid fines or business disruptions. Also, check HOA rules—they can affect whether you can rent your property short-term. Here’s a simple breakdown of the key regulations.
Licensing and Permits Most cities in Colorado require a short-term rental license. This often involves submitting an application, paying fees, and meeting safety and zoning requirements. Every City can have different laws, so be sure to read up on local laws and ordinances.
Taxes You’ll need to collect and remit lodging taxes, which may include state, county, and city taxes. Platforms like Airbnb can automate this process in some areas.
Occupancy Limits Many municipalities have rules regarding the maximum number of guests and parking spaces allowed.
Insurance Requirements Standard homeowners’ insurance may not cover short-term rentals. Consider a specialized policy to protect against potential damages or liability claims.
Compliance with HOA Rules If the property is part of an HOA, review their rules regarding short-term rentals. Some HOAs prohibit or heavily regulate them.
Best Locations to Buy Short Term Rental Properties in Colorado
If you’re looking to invest in a short term rental in Colorado, choosing the right location is a key first step in learning how to buy a short term rental property in Colorado. Some cities attract tourists year-round, while others have steady demand due to local attractions. Here are some of the best locations for short-term rentals in the state:
Denver Denver attracts both business travelers and tourists year-round. Neighborhoods like RiNo and LoDo offer high occupancy rates but come with strict licensing rules.
Breckenridge Breckenridge’s ski-in, ski-out properties or homes with mountain views are perfect for vacationers seeking a luxurious experience.
Colorado Springs With attractions like Garden of the Gods and Pikes Peak, Colorado Springs offers affordable properties with steady demand.
Estes Park As the gateway to Rocky Mountain National Park, cabins and homes with scenic views in Estes Park are in constant demand, especially in summer.
Fort Collins Known for its vibrant downtown and outdoor adventures, Fort Collins appeals to families, nature lovers, and beer enthusiasts.
Best Practices for Managing a Short Term Rental Property in Colorado
To run a successful Airbnb, create a cozy, well-furnished space and set clear house rules. If you don’t live nearby, consider hiring a property manager or using automation to keep things running smoothly. Paying attention to details and making guests feel welcome will help ensure a great experience.
Furnish Thoughtfully Create a welcoming space with quality furniture, cozy bedding, and regional decor. Essential items include Wi-Fi, a coffee maker, and fully stocked kitchen supplies. Focus on durability for high-traffic areas when you buy a short term rental property in Colorado.
Set House Rules Clearly communicate your rules to guests. Common rules include:
No smoking inside the property.
Quiet hours between 10 PM and 8 AM.
Maximum occupancy limits.
Instructions for trash and recycling.
Hire a Property Manager If you’re not local, consider hiring a property manager. They can handle guest communication, cleaning, maintenance, and emergency issues.
Automate Operations Use tools like Hospitable or Guesty to automate bookings, check-in instructions, and guest reviews. This ensures smooth operations and saves time.
Prioritize Guest Experience Respond quickly to inquiries, provide local recommendations, and go the extra mile with touches like welcome baskets or guidebooks.
How to Decorate Your Short Term Rental Property in Colorado
Furnish your Airbnb with a theme that reflects the local area and focus on quality basics like comfy mattresses and plush towels. Highlight unique features like views or outdoor spaces, and choose durable, easy-to-clean items, especially if you’re hosting families. These simple touches will enhance the guest experience.
Choose a Theme Consider a theme that reflects the local area, such as a rustic mountain cabin or a modern urban vibe.
Invest in Quality Basics Guests appreciate comfortable mattresses, plush towels, and high-quality cookware. Avoid overly trendy items that may need frequent replacements.
Highlight Unique Features Showcase views, fireplaces, or outdoor spaces in your decor. Add items like cozy throws, wall art, or board games to enhance the guest experience.
Keep it Practical Opt for easy-to-clean materials, durable furniture, and child-friendly options if targeting family travelers.
Selling a Short Term Rental Property in Colorado
When selling a short term rental in Colorado, make sure the property is in top condition and highlight its success with financial data. Target investors by showcasing occupancy rates, nightly rates, and reviews. Address any damage before listing or disclose it transparently. Working with a real estate agent experienced in short-term rentals can help position the property as a profitable investment.
Maximize Appeal Before listing, ensure the property is well-maintained and clean. Highlight its success as a short-term rental by including financial performance data in your listing.
Target the Right Buyers Market the property to investors looking for turnkey short-term rentals. Include information on occupancy rates, nightly rates, and reviews.
Handle Damage Carefully If the property has sustained damage, address it before selling. If that’s not feasible, disclose the issues and adjust the price accordingly. Buyers appreciate transparency.
Work with a Specialist Hire a real estate agent experienced in selling short-term rentals. They can position your property as an income-generating opportunity.
How to Sell a Short Term Rental Property in Colorado Fast
Need to sell your short-term rental fast? If it’s damaged or you just want a hassle-free sale, selling to a cash buyer like New Era Home Buyers is a great option. We buy properties as-is, so you don’t have to worry about repairs or upgrades.
Whether your rental has wear and tear or you want to skip the long, stressful selling process, we offer a quick and easy solution. We provide a fair cash offer based on your home’s current condition and can close in days instead of months.
As experienced cash buyers, we make selling simple—no appraisals, inspections, or long negotiations. If you’re ready to sell your short-term rental in Colorado, we’re here to help with a fast, stress-free sale.
Useful Websites for Short Term Rental Property Owners
I you want to buy a short term rental property in Colorado, we recommend checking out some these useful websites for short-term rental owners in Colorado:
At New Era Home Buyers, we specialize in purchasing properties quickly and efficiently, including short-term rentals and Airbnb properties in Colorado. Whether you’re looking to sell a fully furnished vacation home, a rental property generating consistent income, or a property that’s no longer meeting your needs, we offer a hassle-free solution. We can teach how to buy a short term rental property in Colorado or buy your Airbnb property you no longer want.
Our process is simple—no repairs, no commissions, and no closing costs. We buy homes as-is, so you can sell hassle-free and walk away without the usual headaches.
With our expertise in the Colorado market, we understand short-term rentals and offer a fair cash price based on your property’s value.
Whether you’re cashing out or moving on to your next investment, New Era Home Buyers makes selling your short-term rental fast and stress-free.
Brett is a real estate investor in Denver, Colorado and has been working in real estate for over 20 years. He grew up in Aurora, Colorado and earned his MBA from the University of Denver. Besides flipping houses, Brett loves spending time with his wife and two daughters. In his free time he loves playing golf, skiing and giving back to his community. He owns New Era Home Buyers in Denver, CO.