Is Colorado Springs, Colorado Good for Airbnb Investment?

To start an Airbnb in Colorado Springs, Colorado, begin by researching local regulations as the city requires short-term rental operators to obtain a business license and comply with zoning restrictions that limit rentals to no more than 120 days per year in residential areas, with some neighborhoods having additional restrictions. Contact the Colorado Springs Planning Department to verify your property's zoning allows short-term rentals and obtain necessary permits including a business license ($25-50 annually) and potentially a conditional use permit if required for your zone. Find a suitable property by purchasing or leasing in permitted areas, focusing on neighborhoods near popular attractions like Garden of the Gods, downtown, or near military bases, with typical investment properties ranging $300,000-600,000. Furnish the space completely with quality furniture, linens, kitchen essentials, WiFi, and safety equipment including smoke detectors, carbon monoxide detectors, and fire extinguishers as required by city code. Create compelling listings on Airbnb, VRBO, and other platforms with professional photography, detailed descriptions highlighting proximity to Pikes Peak and local attractions, and competitive pricing typically ranging $80-200 per night depending on size and location. Manage operations by establishing cleaning protocols between guests, responding promptly to inquiries, coordinating check-ins/check-outs, maintaining the property, collecting and remitting Colorado state sales tax (2.9%) plus Colorado Springs city tax (3.12%), and keeping detailed records for tax purposes while ensuring compliance with occupancy limits and noise ordinances to maintain good neighbor relations.

To identify profitable short-term rental properties in Colorado Springs, Colorado, focus on locations within 10-15 minutes of major attractions like Pikes Peak, Garden of the Gods, downtown, and military bases (Fort Carson, Peterson Space Force Base, NORAD), as these drive consistent demand from tourists and military personnel. Target properties with 2-4 bedrooms, mountain or city views, outdoor spaces, parking, and amenities like hot tubs or fire pits that command premium rates of $150-300+ per night. Analyze comparable STR properties using AirDNA, Mashvisor, and VRBO data to identify neighborhoods with high occupancy rates (70%+) and average daily rates, particularly in areas like Old Colorado City, Manitou Springs, and downtown corridors. Research competition density through Airbnb and VRBO searches, avoiding oversaturated markets while identifying underserved pockets with strong tourism fundamentals. Utilize Colorado Springs-specific resources including the Colorado Springs Convention & Visitors Bureau tourism data, El Paso County property records, local STR regulation updates, and connect with Colorado Springs real estate agents specializing in investment properties who understand seasonal demand patterns driven by summer tourism, military relocations, and winter sports activities at nearby ski areas.

To obtain an Airbnb/STR permit in Colorado Springs, Colorado, you must first register your short-term rental with the city through the Planning and Community Development Department located at 30 South Nevada Avenue or online through the city's permitting portal. Required documents include a completed STR license application, proof of property ownership or lease agreement with landlord consent, floor plan of the rental unit, parking plan showing adequate off-street parking, contact information for a local responsible party available 24/7, and proof of liability insurance with minimum $1 million coverage. The application fee is approximately $200 annually, with additional fees for inspections if required. You must also obtain a Colorado state sales tax license and city business license, which costs around $25. The timeline typically takes 4-6 weeks for processing once all documents are submitted, though this can extend to 8 weeks during peak application periods. Colorado Springs specific requirements include limiting occupancy to 2 people per bedroom plus 2 additional guests, maintaining a guest registry, posting the STR license number in all advertisements, ensuring compliance with HOA restrictions if applicable, and adhering to noise ordinances with quiet hours from 10 PM to 7 AM. Properties in certain historic districts may have additional restrictions, and the city caps the total number of STR licenses issued annually, so early application is recommended.

Short-term rentals (STRs) are legal in Colorado Springs, Colorado, but are subject to specific regulations implemented in 2019 and updated in 2021. The city requires STR operators to obtain a business license and comply with zoning restrictions that limit STRs primarily to commercial and mixed-use zones, while prohibiting them in most residential neighborhoods except for accessory dwelling units and certain grandfathered properties. Key restrictions include occupancy limits based on bedrooms, parking requirements, noise ordinances, and safety standards including smoke and carbon monoxide detectors. Properties must be owner-occupied or have a local contact person available 24/7, and there are caps on the total number of STR licenses issued in certain areas. Recent changes have tightened enforcement mechanisms and increased penalties for violations, while also establishing clearer pathways for compliance. The regulations aim to balance tourism revenue with neighborhood preservation, and violations can result in fines up to $2,600 per day and license revocation.

The best Airbnb investment areas in Colorado Springs include Old Colorado City, which attracts tourists year-round due to its historic charm, proximity to Garden of the Gods, and walkable shops and restaurants. Downtown Colorado Springs offers strong potential for business travelers visiting companies like Lockheed Martin and Fort Carson military personnel, with easy access to the airport and corporate facilities. The Broadmoor area commands premium rates due to luxury tourism, golf events, and high-end conferences at The Broadmoor resort, though property costs are higher. Manitou Springs draws visitors for its mineral springs, quirky attractions like the Penny Arcade, and serves as a gateway to Pikes Peak, making it ideal for tourist rentals. The Cheyenne Mountain area appeals to both tourists visiting the zoo and military families due to NORAD and Cheyenne Mountain Air Force Station proximity. Near Garden of the Gods, properties benefit from year-round tourism to this iconic red rock formation, while areas close to the Olympic Training Center attract sports enthusiasts and families of athletes, providing steady demand throughout the year.

Airbnb hosts in Colorado Springs, Colorado are subject to multiple lodging taxes including the Colorado state lodging tax of 2.9% on gross receipts, El Paso County's lodging tax of 1% on gross receipts, and Colorado Springs city lodging tax of 2.75% on gross receipts, totaling approximately 6.65% in combined lodging taxes. The Colorado Tourism Office collects the state portion, while local taxes are typically collected by the Colorado Springs Finance Department and El Paso County Revenue Department respectively. Airbnb automatically collects and remits these taxes for most bookings made through their platform as of 2017, though hosts should verify this applies to their specific listings and may need to register directly with local tax authorities if operating outside Airbnb's collection system. Hosts must obtain a Colorado Springs business license and may need to register for a Colorado state sales tax license, with monthly or quarterly remittance typically required depending on volume. Exemptions generally apply to stays exceeding 30 consecutive days, which are considered long-term rentals rather than transient lodging, and some properties may qualify for exemptions if they meet specific criteria such as being owner-occupied or falling below certain rental thresholds, though these exemptions vary by jurisdiction and hosts should verify current requirements with local tax authorities.

The total cost to start an Airbnb in Colorado Springs, Colorado is approximately $485,000-$565,000. Property purchase represents the largest expense at $400,000-$450,000 based on median home prices in desirable neighborhoods like Old Colorado City and downtown areas. Furnishing costs range from $25,000-$35,000 for quality furniture, bedding, kitchen essentials, and decor to create an attractive rental space. Initial setup costs including professional photography, listing creation, and marketing materials total around $2,000-$3,000. Permits and fees include a business license ($50), short-term rental permit ($200-$500 depending on location), and potential HOA approval costs totaling $500-$1,000. Insurance for short-term rentals costs approximately $2,500-$4,000 annually, significantly higher than standard homeowner's insurance. Utilities including electricity, gas, water, internet, and cable average $300-$400 monthly or $1,800-$2,400 for six months. First six months operating costs encompass cleaning services ($150 per turnover), maintenance reserves ($200 monthly), supplies and amenities ($100 monthly), platform fees (3% of bookings), and marketing expenses, totaling approximately $8,000-$12,000 depending on occupancy rates and seasonal demand in this popular tourist destination near Pikes Peak and Garden of the Gods.

Airbnb properties in Colorado Springs, Colorado demonstrate strong profitability potential with average annual revenues ranging from $25,000-$45,000 for typical 2-3 bedroom properties, while operating expenses typically run 40-60% of gross revenue including cleaning fees ($75-125 per turnover), property management (15-25%), utilities ($200-350/month), insurance ($1,200-2,000 annually), and maintenance costs. Properties near popular attractions like Pikes Peak, Garden of the Gods, and downtown areas achieve higher occupancy rates of 65-75% with average daily rates of $120-180, resulting in net profit margins of 25-35% for well-managed properties. Success factors include strategic location within 10 miles of major attractions, professional photography, competitive pricing during peak summer and winter seasons, and maintaining 4.8+ star ratings through consistent guest experiences. Case studies from 2022-2023 show that investors purchasing properties in the $300,000-450,000 range in neighborhoods like Old Colorado City and Manitou Springs achieved 8-12% annual returns, with some luxury properties near Broadmoor commanding $250+ nightly rates and generating over $60,000 annually, though higher-end properties face increased competition and seasonal fluctuations that can impact overall profitability during slower spring and fall periods.

Airbnb investments in Colorado Springs, Colorado typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% depending on property location and management efficiency. Properties near popular attractions like Pikes Peak, Garden of the Gods, and downtown areas command higher nightly rates of $80-150, while suburban locations average $60-100 per night. Initial profitability usually occurs within 12-18 months for well-positioned properties, with break-even points accelerated by Colorado Springs' strong tourism market driven by outdoor recreation and military presence from Fort Carson and the Air Force Academy. Investment properties in desirable neighborhoods like Old Colorado City, Manitou Springs vicinity, or near the University of Colorado Colorado Springs campus show stronger performance, with some investors achieving 15% annual returns through strategic renovations and premium amenities targeting the area's year-round visitor base of approximately 6 million tourists annually.

STRSearch is a leading national platform that specializes in identifying profitable short-term rental properties for investors in Colorado Springs, Colorado. Local real estate agents like The Platinum Group Real Estate and Keller Williams Partners Realty have extensive experience helping investors find Airbnb-suitable properties in desirable neighborhoods like Old Colorado City, Manitou Springs, and downtown areas. National services including Mashvisor, BiggerPockets, and AirDNA provide market analysis and property identification tools specifically for short-term rental investments in the Colorado Springs market. Local property management companies such as RedAwning and Vacasa offer full-service solutions for investors looking to purchase and operate Airbnb properties. Real estate investment firms like HomeUnion and Roofstock have expanded their services to include short-term rental property acquisition in Colorado markets. Additionally, local agents from RE/MAX Properties and Coldwell Banker have developed specializations in investment properties suitable for vacation rentals, particularly focusing on properties near popular attractions like Pikes Peak, Garden of the Gods, and the Olympic Training Center that attract consistent tourist traffic year-round.