Is Dillon, Colorado Good for Airbnb Investment?

To start an Airbnb in Dillon, Colorado, begin by researching local regulations through the Town of Dillon's planning department, as Summit County requires short-term rental licenses and Dillon has specific zoning restrictions limiting rentals to certain residential areas with a maximum occupancy typically around 10 people. Obtain necessary permits including a Summit County short-term rental license ($200-400 annually), Colorado state sales tax license, and ensure compliance with fire safety codes requiring smoke detectors, carbon monoxide detectors, and fire extinguishers. Find a suitable property in approved zones, focusing on areas near Lake Dillon or downtown that allow short-term rentals, with properties typically ranging from $400,000-800,000 for condos to $800,000-2,000,000 for single-family homes. Furnish the space with mountain-appropriate amenities including quality bedding, kitchen essentials, outdoor gear storage, heating systems rated for high altitude, and consider ski equipment storage given Dillon's proximity to Keystone and Arapahoe Basin. List your property on Airbnb and VRBO with competitive pricing around $150-400 per night depending on size and season, highlighting lake access, skiing proximity, and mountain views. Manage the property by establishing relationships with local cleaning services ($80-150 per turnover), maintenance contractors familiar with high-altitude challenges, and consider property management companies like Vacasa or RedAwning that operate in Summit County, while maintaining 24/7 guest communication and adhering to Dillon's noise ordinances and parking restrictions that typically limit guests to 2-3 vehicles per property.

To identify profitable short-term rental properties in Dillon, Colorado, focus on locations within walking distance of Lake Dillon, close to Keystone Resort (8 miles) and Breckenridge (12 miles), or near the Dillon Marina and recreational areas, as these command premium rates year-round. Target 2-4 bedroom condos or single-family homes built after 1990 with mountain or lake views, updated kitchens, hot tubs, garage parking, and ski storage, as these features significantly boost occupancy rates and nightly rates which typically range from $150-400 depending on season and property size. Analyze comparable properties using AirDNA and Mashvisor to identify the $300K-800K price range that generates 15-25% annual returns, while researching competition through Airbnb and VRBO searches to find gaps in amenities or underpriced properties. Utilize STR-specific tools like Rabbu and AllTheRooms for Dillon market data, partner with local property management companies like Summit County Mountain Retreats or RedAwning who understand Summit County regulations, and leverage the Colorado Association of Realtors MLS system to identify properties in HOA-friendly buildings, since Dillon allows STRs with proper licensing but some HOAs restrict them, making due diligence on local zoning and HOA bylaws critical for long-term profitability.

To obtain an Airbnb/STR permit in Dillon, Colorado, you must first contact the Town of Dillon Planning Department at Town Hall located at 275 Lake Dillon Drive to begin the application process. Required documents typically include a completed short-term rental application form, proof of property ownership or lease agreement with landlord consent, a floor plan of the rental unit, proof of liability insurance (minimum $1 million coverage), contact information for a local property manager or 24-hour emergency contact within 30 minutes of the property, and a parking plan showing adequate off-street parking spaces. The application fee is approximately $200-300 with an annual renewal fee of around $150-200, and you may need to pay additional fees for inspections or zoning compliance reviews. The timeline for approval typically takes 4-6 weeks from submission of a complete application, though this can extend to 8-10 weeks during peak application periods or if additional documentation is required. Specific Dillon requirements include maintaining a maximum occupancy of 2 people per bedroom plus 2 additional guests, ensuring quiet hours from 10 PM to 8 AM, providing adequate trash and recycling storage, maintaining the property in good condition, and responding to any noise or conduct complaints within 30 minutes, with properties in certain residential zones potentially subject to additional restrictions or prohibited entirely depending on zoning classifications.

Short-term rentals (STRs) are legal in Dillon, Colorado, but operate under specific regulations established by the town. As of recent years, Dillon requires STR operators to obtain a business license and comply with occupancy limits, parking requirements, and noise ordinances. The town has implemented a registration system where property owners must register their rentals and pay associated fees. STRs are generally permitted in residential zones but may face restrictions in certain areas or housing types, particularly those designated for workforce housing. Dillon has been working to balance tourism revenue with housing availability for local workers, leading to ongoing discussions about potential caps on STR permits or additional regulations. Property owners must also comply with state and county tax requirements, including lodging taxes. The town typically requires 24/7 local contact information and may impose penalties for violations of noise, parking, or occupancy rules.

The best Airbnb investment areas in Dillon, Colorado include the Lake Dillon/Marina District which offers prime waterfront access and attracts summer boaters, fishermen, and winter sports enthusiasts heading to nearby Keystone Resort (8 miles away), making it ideal for year-round rental demand. The Historic Downtown Dillon area near Main Street provides walkable access to restaurants, shops, and the Dillon Amphitheater which hosts summer concerts, appealing to tourists seeking convenience and entertainment. The Wildernest/Silverthorne border area offers mountain views and quick access to both Keystone and Copper Mountain (15 minutes), attracting ski groups and summer hikers exploring the Tenmile Range. The Buffalo Mountain/Swan Mountain Road corridor provides secluded luxury cabin opportunities with panoramic lake and mountain views, commanding premium rates from high-end travelers seeking privacy and scenic beauty. Properties near the Dillon Valley East Golf Course attract golf enthusiasts during summer months and serve as convenient bases for winter sports visitors, while the area around Sapphire Point offers proximity to one of Colorado's most popular wedding and photography venues, creating demand from wedding parties and photographers year-round.

Airbnb properties in Dillon, Colorado are subject to multiple lodging taxes including Colorado state sales tax of 2.9%, Summit County lodging tax of 4.4%, and Dillon municipal lodging tax of 4%, totaling approximately 11.3% in combined taxes on short-term rental accommodations. The Colorado state sales tax is collected through the state's Department of Revenue system, while Summit County's lodging tax is administered by the Summit County Finance Department and applies to all lodging stays under 30 consecutive days. Dillon's municipal lodging tax is collected by the Town of Dillon and also applies to short-term rentals typically under 30 days. Airbnb automatically collects and remits these taxes for most properties through their platform as of 2019-2020, though hosts should verify their specific tax obligations with local authorities. Properties rented for 30 days or longer are generally exempt from lodging taxes, and some exemptions may apply for certain types of accommodations or extended stays, but hosts remain responsible for ensuring compliance with all applicable tax requirements and should register with appropriate local and state tax authorities even when Airbnb handles collection.

Starting an Airbnb in Dillon, Colorado requires significant upfront investment due to the area's mountain resort location. Property purchase costs average $650,000-$750,000 for a suitable 2-3 bedroom condo or townhome based on 2023-2024 market conditions. Furnishing costs typically range $15,000-$25,000 for complete setup including furniture, appliances, linens, and décor to create an attractive rental space. Initial setup expenses including professional photography, listing creation, and marketing materials cost approximately $2,000-$3,000. Permits and fees in Summit County include short-term rental licenses ($500-$1,000), business licenses ($100-$300), and potential HOA approval fees ($200-$500). Insurance for short-term rentals runs $2,000-$4,000 annually, significantly higher than standard homeowner's policies. Monthly utilities including electricity, gas, water, internet, and cable average $300-$500 depending on season and property size. First six months operating costs encompass cleaning services ($150-$200 per turnover), supplies and maintenance ($200-$400 monthly), property management if used (20-30% of revenue), and marketing expenses ($100-$300 monthly), totaling approximately $8,000-$15,000. The complete startup investment ranges from $675,000-$800,000, making Dillon's Airbnb market accessible primarily to well-capitalized investors targeting the area's strong ski and summer tourism seasons.

Airbnb properties in Dillon, Colorado demonstrate strong profitability potential with average nightly rates ranging from $150-$400 depending on property size and proximity to Lake Dillon and ski resorts, generating annual revenues of $35,000-$85,000 for well-managed properties with 60-70% occupancy rates. Operating expenses typically include 25-30% for cleaning and maintenance, 3% Airbnb service fees, 8-12% property management if outsourced, plus utilities, insurance, and supplies totaling approximately 45-55% of gross revenue, resulting in net profit margins of 25-35% for successful operators. Success factors include strategic location within walking distance of the lake or shuttle routes to Keystone and Arapahoe Basin, professional photography, competitive pricing that adjusts seasonally (peak winter ski season and summer lake activities command premium rates), and maintaining superhost status through consistent 4.8+ ratings. A typical 3-bedroom lakefront condo generating $65,000 annually with $35,000 in expenses yields $30,000 profit (46% margin), while properties further from amenities may achieve 20-25% margins, with the market showing resilience due to Dillon's year-round appeal and limited hotel inventory driving consistent demand from Denver metro visitors and destination travelers.

Airbnb investments in Dillon, Colorado typically generate annual ROI of 12-18% due to the town's proximity to Keystone Resort and Lake Dillon recreational activities, with peak performance during ski season (December-March) and summer boating season (June-August). Cash-on-cash returns generally range from 8-14% annually, depending on property type and financing structure, with lakefront and ski-accessible properties commanding premium rates of $150-300 per night during peak seasons and $80-150 during shoulder periods. Most investors achieve profitability within 18-24 months, factoring in initial renovation costs of $15,000-35,000 for short-term rental optimization, property management fees of 20-25%, and occupancy rates averaging 65-75% annually. Properties within walking distance of the marina or shuttle routes to ski resorts typically outperform the market by 15-25%, while the limited inventory due to Summit County's strict short-term rental regulations has maintained strong demand and rate growth of 6-8% annually since 2019.

STRSearch is a leading national platform that specializes in identifying profitable short-term rental properties for investors looking in Dillon, Colorado. Local real estate agents in the area include Summit County specialists like Slifer Smith & Frampton Real Estate, Berkshire Hathaway HomeServices Rocky Mountain Realtors, and LIV Sotheby's International Realty who have extensive knowledge of Dillon's vacation rental market. National services that focus on Airbnb investment properties include AirDNA for market analytics, Mashvisor for property analysis, BiggerPockets for investor networking and deal sourcing, and Awning for short-term rental investment guidance. Regional companies like Colorado Mountain Properties and Summit Sotheby's International Realty have agents who specialize in investment properties around Lake Dillon and the surrounding ski areas. Additional services include STR Helper for property management insights, HostGPO for investor resources, and local property management companies like RedAwning and Vacasa that can provide market insights for potential investors looking to purchase profitable vacation rental properties in the Dillon area.