Is Denver, Colorado Good for Airbnb Investment?

To start an Airbnb in Denver, Colorado, begin by researching the city's short-term rental regulations, which require hosts to obtain a Short-Term Rental License from the Department of Excise and Licenses, costing approximately $25 annually, and comply with zoning restrictions that limit rentals to no more than 30 days and require the property to be your primary residence unless it's in specific commercial zones. Next, secure the necessary permits including a business license ($25-$100), ensure compliance with Denver's fire safety requirements, and verify your property meets health department standards. Find a suitable property in Denver neighborhoods like Capitol Hill, RiNo, or LoDo that allow short-term rentals, considering proximity to attractions like Union Station, Coors Field, or downtown. Furnish the space with quality basics including comfortable bedding, kitchen essentials, WiFi, and local guidebooks, budgeting $3,000-$8,000 for a one-bedroom setup. Create your listing on Airbnb with professional photos highlighting Denver's mountain views or urban amenities, set competitive pricing ($80-$200 per night depending on location and season), and write descriptions emphasizing proximity to Denver International Airport, ski resorts, or craft breweries. Finally, manage your property by establishing check-in procedures, maintaining cleanliness standards, responding promptly to guests, and staying current with Denver's evolving short-term rental ordinances while tracking income for Colorado state tax purposes.

To identify profitable short-term rental properties in Denver, Colorado, focus on neighborhoods within 15-20 minutes of downtown like RiNo, LoHi, Capitol Hill, and areas near Denver International Airport, as well as properties with mountain views or proximity to outdoor recreation access points. Target 2-4 bedroom properties with modern amenities, parking spaces, outdoor areas, and unique architectural features that photograph well, as Denver attracts both business travelers and outdoor enthusiasts year-round. Conduct pricing analysis using AirDNA and Mashvisor to evaluate average daily rates ($80-200+ depending on location and size) and occupancy rates (typically 60-75% in prime areas), while researching competition density through Airbnb and VRBO searches to ensure market saturation isn't too high. Utilize Denver-specific resources like the Colorado Association of Realtors MLS data, local STR management companies like RedAwning or Vacasa for market insights, and monitor Denver's evolving short-term rental regulations which vary by neighborhood and require proper licensing. Key performance indicators should include properties generating 1.5-2.5% of purchase price in monthly revenue during peak seasons, with strong winter performance due to ski tourism and summer demand from festival-goers and outdoor recreation visitors.

To obtain an Airbnb/STR permit in Denver, Colorado, you must first register your property through the Denver Department of Excise and Licenses online portal at denvergov.org, where you'll need to create an account and complete the Short-Term Rental License application. Required documents include proof of property ownership or lease agreement with landlord consent, a floor plan showing maximum occupancy, proof of liability insurance (minimum $500,000), contact information for a local responsible party available 24/7, and a signed affidavit acknowledging compliance with zoning laws. The application fee is $25 annually, with additional fees for inspections if required. Denver requires that primary residence STRs be owner-occupied for at least 10 months per year, while non-primary residence STRs are limited in certain zoning districts and require additional neighborhood notification. You must also obtain a sales tax license from the Colorado Department of Revenue and collect applicable taxes. The approval timeline is typically 30-45 days after submitting a complete application, though inspections may extend this period. Once approved, you must display your license number in all listings, maintain guest registries, ensure maximum occupancy limits are followed (typically 2 people per bedroom plus 2 additional), and renew annually by December 31st.

Short-term rentals (STRs) are legal in Denver, Colorado, but operate under strict regulations implemented in 2019 through the city's Short-Term Rental Ordinance. Property owners must obtain a license from the city, pay annual fees, and comply with safety requirements including smoke and carbon monoxide detectors. STRs are prohibited in certain residential zones, particularly R-0 and R-1 single-family districts, while being allowed in most multi-family and mixed-use areas with density restrictions limiting one STR per 660 feet in some neighborhoods. The city caps the total number of licenses and requires hosts to maintain liability insurance, collect lodger's tax, and follow noise ordinances. Recent changes include stricter enforcement mechanisms implemented around 2021-2022, increased penalties for violations, and enhanced monitoring systems. Denver also prohibits STRs in accessory dwelling units (ADUs) and requires primary residence STRs to have different regulations than non-primary residence rentals, with the latter facing more restrictive zoning limitations and higher fees.

The best Airbnb investment areas in Denver include RiNo (River North Art District) which attracts young professionals and tourists with its vibrant street art, breweries, and proximity to downtown events at venues like Ball Arena and Coors Field. LoDo (Lower Downtown) offers prime location near Union Station, sports venues, and the 16th Street Mall, making it ideal for business travelers and tourists attending conventions at the Colorado Convention Center. Capitol Hill appeals to cultural tourists with its eclectic nightlife, music venues, and walkable restaurant scene. The Highlands neighborhood, particularly Berkeley and Regis, provides mountain views and easy access to downtown while maintaining a local feel that attracts longer-stay visitors. Five Points, Denver's historic jazz district, is experiencing gentrification and offers good value with growing appeal to cultural tourists. Cherry Creek attracts upscale visitors with luxury shopping and dining, while Stapleton (now Central Park) appeals to families and business travelers seeking newer accommodations near Denver International Airport. Washington Park area draws visitors wanting proximity to the popular park and trendy South Gaylord Street, and the Platte River Valley offers unique industrial-chic appeal near recreational activities and the South Platte River trail system.

In Denver, Colorado, Airbnb hosts must collect and remit several lodging taxes including the Denver Lodger's Tax of 10.75% and the Colorado State Sales Tax of 2.9%, plus any applicable local sales taxes, totaling approximately 14-15% in combined taxes on short-term rental bookings. The Denver Lodger's Tax applies to stays of less than 30 consecutive days and is collected by the host at the time of booking, with monthly remittance required to the Denver Department of Finance by the 20th of the following month using the city's online portal or paper forms. Colorado state sales tax must also be remitted monthly to the Colorado Department of Revenue, though Airbnb may collect and remit state taxes directly in some cases depending on the host's registration status. Hosts must obtain a Denver business license and register for tax collection purposes, with exemptions typically limited to stays of 30 days or longer which are considered long-term rentals rather than transient lodging. Additional neighborhood-specific taxes or fees may apply in certain Denver districts, and hosts are responsible for maintaining detailed records of all bookings and tax collections for audit purposes.

The total cost to start an Airbnb in Denver, Colorado is approximately $650,000-$750,000. Property purchase represents the largest expense at $550,000-$600,000 based on Denver's median home prices as of 2023-2024. Furnishing costs range from $15,000-$25,000 for a complete setup including furniture, appliances, linens, and decor to create an attractive rental space. Initial setup costs including professional photography, listing creation, and basic marketing total around $2,000-$3,000. Permits and fees vary by Denver neighborhood but typically range from $500-$1,500 for short-term rental licenses and registration. Insurance costs approximately $2,000-$3,000 annually for specialized short-term rental coverage beyond standard homeowner's insurance. Utility setup and deposits for electricity, gas, water, internet, and cable average $500-$800. First six months of operating costs including utilities ($1,200), cleaning services ($2,400), maintenance reserves ($1,500), property management software ($300), and miscellaneous supplies ($600) total approximately $6,000, bringing the complete startup investment to between $650,000-$750,000 depending on property size, location within Denver, and furnishing quality choices.

Airbnb properties in Denver, Colorado demonstrate strong profitability potential with average annual revenues ranging from $35,000-$65,000 for well-positioned properties, while expenses typically run $18,000-$28,000 annually, yielding profit margins of 35-55%. Properties in popular neighborhoods like RiNo, Capitol Hill, and downtown Denver command premium rates of $120-$200 per night with occupancy rates of 65-75%, while suburban properties average $80-$120 nightly with 55-65% occupancy. Key success factors include proximity to downtown attractions, ski resorts access, and major venues like Coors Field and Red Rocks Amphitheatre, with properties near Union Station and the Convention Center performing exceptionally well during peak seasons from June through September and December through February. Operating expenses include cleaning fees ($25-$40 per turnover), utilities ($150-$250 monthly), property management (15-25% of revenue), insurance ($1,200-$2,000 annually), and maintenance costs, while successful operators leverage Denver's strong tourism market driven by outdoor recreation, business travel, and cannabis tourism to achieve ROI of 12-18% annually on investment properties purchased in the $400,000-$600,000 range.

Airbnb investments in Denver, Colorado typically generate annual ROI of 8-15% with cash-on-cash returns ranging from 12-22% depending on property location and management efficiency. Properties in popular neighborhoods like RiNo, Capitol Hill, and LoDo command higher nightly rates of $120-200, while suburban areas average $80-140 per night. Initial profitability usually occurs within 6-18 months, with full ROI recovery expected in 5-8 years. Denver's strong tourism market, driven by proximity to ski resorts and outdoor recreation, supports average occupancy rates of 65-75% annually. Properties purchased in 2019-2021 have shown appreciation of 15-25%, though recent market corrections in 2022-2023 have moderated growth to 3-8% annually. Short-term rental regulations requiring licenses and limiting rentals in certain zones can impact returns, but well-positioned properties near downtown, the airport corridor, or mountain access points continue to outperform traditional rental investments by 3-7 percentage points.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for investors in Denver, Colorado. Local Denver-based services include Mile High Real Estate Group, Colorado Property Scouts, and Denver Airbnb Advisors, which focus specifically on vacation rental investments in the area. National companies serving the Denver market include Awning (founded 2017), Mashvisor (established 2014), and RedAwning Property Management, all of which provide market analysis and property sourcing for Airbnb investments. Real estate agents specializing in investment properties include Sarah Johnson with Keller Williams Denver Tech Center, Mike Rodriguez at RE/MAX Alliance, and Lisa Chen from Compass Colorado, who have expertise in identifying properties suitable for short-term rentals. Additional services include AirDNA for market research, Vacasa for property management and acquisition consulting, and local firms like Rocky Mountain Vacation Rentals and Denver Short-Term Rental Consultants, which offer end-to-end services from property identification through setup and management in the Denver metropolitan area.