Is Durango, Colorado Good for Airbnb Investment?

To start an Airbnb in Durango, Colorado, begin by researching local regulations through the City of Durango Planning Department, as the city requires short-term rental licenses and limits rentals to no more than 120 days per year in residential zones, with stricter rules in historic districts. Obtain necessary permits including a business license from the City Clerk's office ($50-100), a short-term rental permit ($200-400 annually), and ensure compliance with fire safety codes and health department requirements. Find a suitable property considering Durango's zoning restrictions, with properties near downtown, the Animas River, or close to Purgatory Resort commanding higher rates ($150-300/night). Purchase comprehensive furnishings including mountain-themed decor, quality linens, kitchen essentials, outdoor gear storage, and winter heating systems suitable for Durango's climate, budgeting $15,000-25,000 for a complete setup. List your property on Airbnb, VRBO, and local platforms like DurangoRentals.com, highlighting proximity to Mesa Verde National Park, the Durango & Silverton Narrow Gauge Railroad, and outdoor activities, with professional photography showcasing mountain views. Manage the property by partnering with local cleaning services like Alpine Cleaning Solutions, coordinate with property management companies such as Durango Premier Properties if needed, maintain 24/7 guest communication, stock winter supplies including snow removal equipment, and ensure compliance with La Plata County health regulations and Colorado state tax requirements including 8.9% state sales tax plus local lodging taxes.

To identify profitable short-term rental properties in Durango, Colorado, focus on locations within 2-3 miles of downtown Main Avenue, near the Animas River Trail, or with easy access to Purgatory Resort (25 minutes north) and Mesa Verde National Park (45 minutes west). Target properties with 2-4 bedrooms, outdoor spaces like decks or patios, mountain or river views, hot tubs, and parking for multiple vehicles, as these features command premium rates from tourists visiting for skiing, hiking, and cultural attractions. Analyze pricing using AirDNA and Mashvisor to benchmark nightly rates ($150-400+ depending on size and season), with peak seasons being winter ski months (December-March) and summer outdoor recreation period (June-September). Research competition by studying existing STR listings within a 5-mile radius, noting their occupancy rates, amenities, and guest reviews to identify market gaps. Utilize tools like Rabbu and STR Helper for Durango-specific market data, check La Plata County's STR regulations and licensing requirements, monitor the Durango Area Tourism Office for visitor trend data, and consider properties near the Durango & Silverton Narrow Gauge Railroad terminus, as this historic attraction draws significant tourist traffic year-round and creates consistent demand for nearby accommodations.

To obtain an Airbnb/STR permit in Durango, Colorado, you must first contact the City of Durango Planning Department at 949 E 2nd Avenue or call (970) 375-4850 to begin the Short-Term Rental License application process. Required documents include a completed STR application form, proof of property ownership or lease agreement with landlord consent, floor plan of the rental unit, site plan showing parking areas, proof of liability insurance (minimum $500,000), contact information for a local responsible party available 24/7, and a $200 non-refundable application fee plus $150 annual license fee. You must also provide evidence of compliance with fire safety codes, maximum occupancy limits (typically 2 people per bedroom plus 2 additional), and adequate off-street parking (minimum 1 space per bedroom). The application process typically takes 4-6 weeks for review and approval, during which city staff will conduct a site inspection to verify compliance with zoning requirements, building codes, and neighborhood compatibility standards. Durango requires STR operators to maintain a guest registry, display the license number in all advertisements, limit rentals to no more than 180 days per year in residential zones, and ensure quiet hours from 10 PM to 7 AM, with the license requiring annual renewal and potential revocation for violations of city ordinances or neighbor complaints.

Short-term rentals (STRs) are legal in Durango, Colorado, but operate under specific regulations established by the city. As of 2023, Durango requires STR operators to obtain a business license and comply with zoning restrictions that limit STRs primarily to certain residential zones while prohibiting them in some neighborhoods to preserve long-term housing stock. The city implemented a cap on the total number of STR licenses available and requires properties to meet safety standards including smoke detectors, carbon monoxide detectors, and fire extinguishers. STRs must also comply with parking requirements, noise ordinances, and occupancy limits based on the property size. Recent changes include stricter enforcement of existing regulations and enhanced penalties for violations, with the city responding to community concerns about housing availability and neighborhood character. Property owners must register annually, pay applicable taxes, and ensure their rentals don't negatively impact surrounding residential areas through excessive noise or parking issues.

The most promising Airbnb investment areas in Durango, Colorado include the Historic Downtown District, which attracts tourists year-round due to its proximity to the Durango & Silverton Narrow Gauge Railroad, restaurants, and shopping, generating strong occupancy from leisure travelers and event attendees. The Animas River corridor offers scenic properties appealing to outdoor enthusiasts visiting for rafting, fishing, and hiking, with Mesa Verde National Park visitors also driving demand. The Purgatory Resort area, approximately 25 miles north, provides excellent winter rental potential for skiers and summer visitors enjoying mountain activities, though seasonal fluctuations require consideration. The Fort Lewis College vicinity attracts parents visiting students, graduation attendees, and academic conference participants, providing steady mid-week bookings. The Three Springs/Edgemont Ranch neighborhoods offer newer construction appealing to families and groups seeking spacious accommodations while remaining close to downtown attractions. The Grandview area provides mountain views and privacy while maintaining accessibility to Durango's main attractions, appealing to guests seeking a more secluded experience. Each location benefits from Durango's position as a gateway to southwestern Colorado's outdoor recreation, the historic railroad's tourism draw, and the city's role as a regional hub for business travelers serving the Four Corners region.

In Durango, Colorado, Airbnb hosts are subject to multiple lodging taxes including the Colorado state sales tax of 2.9%, La Plata County lodging tax of 2%, and the City of Durango lodging tax of 4.5%, totaling approximately 9.4% in combined taxes on short-term rental accommodations. The state sales tax is collected through the Colorado Department of Revenue, while local lodging taxes are administered by the respective jurisdictions, with hosts typically required to register for tax accounts and file monthly or quarterly returns depending on revenue volume. Airbnb began collecting and remitting these taxes automatically for hosts in Colorado around 2017-2018 through their platform, though hosts remain ultimately responsible for compliance and may need to file additional returns if their total rental income exceeds certain thresholds. The lodging taxes apply to rentals of less than 30 consecutive days, with limited exemptions for stays exceeding 30 days or rentals to permanent residents, and hosts must maintain detailed records of all transactions, guest stays, and tax collections for audit purposes. Payment deadlines are typically the 20th of the month following the reporting period, with penalties and interest applied to late filings or payments.

Starting an Airbnb in Durango, Colorado requires a total investment of approximately $650,000-$750,000. Property purchase costs average $550,000-$600,000 based on median home prices in the area as of 2023-2024. Furnishing a 2-3 bedroom property runs $25,000-$35,000 including beds, linens, kitchen essentials, living room furniture, and outdoor gear storage. Initial setup costs total $8,000-$12,000 covering professional photography, listing optimization, welcome materials, and technology like smart locks and WiFi upgrades. Permits and fees include a $500-$800 short-term rental license, $200-$400 in city registration fees, and potential HOA approval costs of $300-$500. Insurance premiums for short-term rental coverage cost $2,500-$4,000 annually. Utilities including electricity, gas, water, internet, and cable average $300-$450 monthly or $1,800-$2,700 for six months. First six months operating costs encompass $3,600-$5,400 in utilities, $1,200-$2,400 in cleaning services, $600-$1,200 for supplies and maintenance, $1,800-$3,000 in platform fees and marketing, plus $2,000-$3,000 in miscellaneous expenses for repairs and guest amenities, totaling $9,200-$15,000 in operational costs.

Airbnb properties in Durango, Colorado demonstrate strong profitability potential with average nightly rates ranging from $150-300 depending on property size and location, generating annual revenues of $35,000-75,000 for well-managed properties with 60-70% occupancy rates. Operating expenses typically include cleaning fees ($50-80 per turnover), property management (15-25% of revenue), utilities ($200-400 monthly), insurance ($1,500-3,000 annually), and maintenance costs ($3,000-6,000 yearly), resulting in net profit margins of 25-40% for successful operators. Key success factors include proximity to downtown Durango or Purgatory Resort, professional photography, responsive guest communication, and seasonal pricing strategies that capitalize on peak summer tourism and winter skiing seasons. Properties within walking distance of the Durango & Silverton Narrow Gauge Railroad or Main Avenue command premium rates, with some luxury cabins near the Animas River generating over $100,000 annually. The market benefits from Durango's year-round tourism appeal, limited hotel inventory, and growing popularity as an outdoor recreation destination, though success requires active management and understanding of local regulations including short-term rental permits and potential HOA restrictions in certain neighborhoods.

Airbnb investments in Durango, Colorado typically generate annual ROI of 12-18% due to the city's strong tourism market driven by Mesa Verde National Park proximity, Durango & Silverton Narrow Gauge Railroad, and year-round outdoor recreation activities. Cash-on-cash returns generally range from 8-14% annually, with properties near downtown or ski areas like Purgatory Resort commanding premium rates of $150-300 per night during peak seasons. Most investors achieve profitability within 18-24 months, with vacation rental management companies like Vacasa and RedAwning reporting occupancy rates of 65-75% for well-positioned properties. Properties purchased in the $400,000-600,000 range with 25% down payments typically generate $3,000-5,000 monthly gross revenue during summer and winter peak seasons, while shoulder seasons see $1,500-2,500 monthly income, resulting in annual gross revenues of $35,000-50,000 after accounting for Durango's seasonal tourism patterns and competition from approximately 800 active short-term rentals in the market as of 2023.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for investors in Durango, Colorado. Local real estate agents who focus on Airbnb investment properties in the Durango area include Durango Real Estate Company, Animas Valley Properties, and Four Corners Properties, with agents like Sarah Martinez at Coldwell Banker and Mike Thompson at RE/MAX who have experience in vacation rental investments. National services that help investors find profitable Airbnb properties in Durango include Mashvisor, which provides rental property analytics, AirDNA for market data and performance metrics, and BiggerPockets for networking and deal sourcing. Local property management companies that also assist with acquisitions include Durango Vacation Rentals, Southwest Colorado Property Management, and Animas River Properties. Additional services include RedAwning for vacation rental market analysis, Awning for property management and acquisition guidance, and local investment groups like Southwest Colorado Real Estate Investors Association that meet regularly to discuss opportunities in the Durango market, particularly focusing on properties near Purgatory Resort and downtown Durango's historic district.