Colorado has genuine year round demand, a national brand as an outdoor destination, and some of the most active short-term rental regulation in the country. It is a market where the property is often the easy part and the license is the hard part.
Denver as the base
We buy in Denver rather than the resort towns, which surprises people. The reasoning is straightforward: an urban base with mountain access produces a demand mix that includes business travel, events, medical, and leisure, which flattens the seasonal curve compared with a ski dependent submarket.
The return range is lower than our cabin markets. What Denver offers instead is demand durability across seasons and a resale market that does not depend on a single guest type.
The licensing reality
Colorado municipalities have been among the most active in the country on short-term rental rules, and several resort communities have adopted caps, license moratoriums, or zone based restrictions. Denver has historically tied short-term rental licensing to primary residence requirements, which materially limits pure investment use in the city.
The practical consequence is that Colorado is not a market to buy first and verify second. Confirm in writing, for the specific address: whether a license is available at all, whether the property type and use qualify, whether any cap or waiting list applies, and whether the license transfers on sale. See the verification checklist.
The transferability question is decisive here
In capped or moratorium markets, a property with a transferable license is a fundamentally different asset from an identical property next door without one. Whether the license conveys is often worth more than any feature of the house itself.
Colorado rewards precision on regulation
License availability and transferability vary block by block here. We confirm both in writing before an offer goes out.
Apply NowTwo peaks, two troughs
Colorado runs a winter ski peak and a summer outdoor peak, separated by genuine shoulder seasons in April, May, October, and November. That is a more forgiving profile than a single season market, but the shoulders are real and they need reserves. See cash reserves and seasonality.
Operating notes that matter here: winter access and snow removal are real costs, altitude affects HVAC and plumbing decisions, and guests arriving for outdoor recreation expect gear storage, boot dryers, and parking that accommodates roof racks and trailers.
Tax notes
Colorado taxes individual income, so out of state owners should confirm state filing obligations with their CPA. The federal mechanics are standard: an average period of customer use of seven days or less removes the activity from rental classification, material participation determines whether the loss is usable, and a cost segregation study determines its size.
One market specific consideration: ski oriented properties sometimes fill shoulder seasons with longer stays from seasonal workers or extended visitors, which raises the average period of customer use. If the tax position matters, that booking policy needs to be set deliberately. See the seven day rule explained and our partner firm's material on cost segregation studies.
Figures on this page are internal underwriting averages for properties we have evaluated or closed, not guarantees. Individual results vary with property, season, management, and market conditions. My BnB Accelerator, LLC is not a CPA firm and nothing here is tax advice. Our tax partner is AE Tax Advisors, an independent firm.
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Frequently asked questions
Is Colorado a good short-term rental market?
It has genuine year round demand and strong destination branding, along with some of the most active short-term rental regulation in the country. It is a market where the license, not the property, is usually the hard part, so verification of licensing and transferability comes before anything else.
Why buy in Denver rather than a Colorado ski town?
An urban base with mountain access produces a demand mix that includes business travel, events, medical, and leisure, which flattens the seasonal curve compared with a ski dependent submarket. Internal averages run near $715,000 purchase price against roughly $9,500 monthly revenue.
Can you run a short-term rental in Denver as an investment property?
Denver has historically tied short-term rental licensing to primary residence requirements, which materially limits pure investment use within the city. Requirements change, so confirm the current rules for the specific address in writing before making an offer.
Does a Colorado short-term rental license transfer when the property sells?
It depends on the jurisdiction, and in capped or moratorium markets the answer is often the single most valuable fact about a property. Get written confirmation from the licensing authority before removing contingencies.