10 Best Airbnb Markets in Colorado

Founded 100 years after the signing of the Declaration of Independence, Colorado was labeled as the 'Centennial State'. Did you know that Colorado was popular as the birthplace of Cheeseburgers? Who knew? Moreover, close to Valentine's day, nestled in Northern Colorado is its popular historical location- 'The Sweetheart City' where locals and travelers gather around to celebrate love.

There is no secret as to why Colorado is among the popular destinations in the U.S. Colorado is also known for its stunning and picturesque landscapes, its historic towns, its wildlife, and the range of activities it offers to every visitor from skiing to hiking, and more. What's more, Colorado is well known for its mountains, hot springs, sand dunes, and so forth. What is there not to love about Colorado?

Thanks to its reputation, Colorado welcomed over 1.053 million international visitors alone in 2019; and based on Longwoods International Colorado Report 2020, over 74 million domestic travelers visited Colorado. Among the domestic travelers, 41% were overnight travelers. That being said, according to the Travel research firm, STR ranked Colorado Springs with the third-highest hotel occupancy rate in the nation in July 2020 at 84.4%.

With that being said, this article will highlight:

• Is buying an Airbnb in Colorada a good investment?
• What are the 10 best Airbnb Markets in Colorado?

Is Buying An Airbnb In Colorado A Good Investment?

Despite it being a competitive market for Airbnb, Colorado offers many opportunities for investors in the real estate market especially when it increasingly attracts a number of tourists all year round which translates into a profitable vacation rental business.

To make it even better, in 2020, based on Mashvisor's real estate market analysis, Colorado landed the following rankings:

• 3rd best state for property taxes
• 8th best state for high traditional rental income
• 8th best state for high Airbnb rental income

However, it is still important for an investor to conduct research before investing time, effort, and equity into operating an Airbnb in Colorado. Keep in mind, that understanding the market in Colorado is crucial before you can decide to buy a property. Moreover, ask yourself, in the long run, will there be any profits for the initial investment?

Like with most real estate questions that come to mind, is Colorado real estate a good investment? And what are the best Airbnb markets in Colorado? To answer this, it depends! But of course, a good investment can be defined with different meanings depending on what and how you look at it?

All things considered, here are some considerations before buying a real estate property in Colorado:

Know The Local Laws

Firstly, find out whether a city prohibits short-term rentals. Then, consider what are the zoning laws in Colorado that determines whether a neighborhood will be residential or for business, or both.

Also, consider that certain areas or neighborhoods prohibit Airbnb from operating without a permit or a license. That being said, keep in mind, that Airbnb laws in Colorado differ in ways that can impact your usage. Moreover, it is important to stay updated with the Airbnb laws to know what to expect as local ordinances and legislation govern where and how vacation rentals can operate.

Income

In comparison with traditional rentals, short-term rentals earn higher revenue. Although, income depends on the location, the number of rooms, furnishings, and other factors such as seasons, etc.

Moreover, ask yourself during the off-peak seasons, will your vacation rental afford the upkeep of the property when there is no cash flow? Or would it be a good idea to have a sizeable amount saved above what you estimate it would take to buy an Airbnb real estate?

Tax Benefits

Owning a second home or a property in Colorado is one way to gain tax advantages as investors may deduct their mortgage interest, property taxes, insurance premiums, and utilities that are equal to the percentage of days you've rented out of the total days it's used by anyone.

Note: Consider speaking with a financial advisor about your options or clarity on this point so they could provide their financial expertise on this topic.

Personal Escape

One of the perks of investing in a second home is that if you are tired of the city life or just needed a break or possibly relish a new environment, or want to go skiing with friends or family, you could always opt to stay at the property you own. Moreover, you don't even have to consider or worry about booking a vacation rental.

Mortgage As A Second Home

In some situations, when required a mortgage for investing in real estate for business purposes, most lenders would ask 20% down payment and charge investors a higher interest rate. However, if say you buy a property as a second home, then it only requires half of twenty percent down payment and gets a lower interest rate.

That being said, getting a mortgage as a second home and using it as the primary residence will help give you a lower interest rate.

Consider The Work

Owning a vacation rental has its pros and cons. Before investing in a property, note that there will always be a start-up cost which is furnishing the property as well as providing amenities that is in good working condition. But of course, that's not the only cost to take into consideration. Securing the property such as installing smart locks, etc., and more importantly, insuring the property from damages is crucial to any homeowner.

In addition, operating an Airbnb is not as simple as you may think. Clearly, time and effort are required to operate an Airbnb business but as well as cost. Operating an Airbnb means looking at refurbishing and upkeep of the property, cleaning every time a guest checks out, fixing or hiring handymen, managing bookings, replying to guest inquiries, and so forth.

It takes a lot of work in owning a vacation rental especially when you are living hours away from the property and if you are ready for the challenges that come along with it, then starting an Airbnb might be just for you!

What Are The 10 Best Airbnb Markets in Colorado?

1. Avon

Home to Beaver Creek Ski Resort and Vial, Avon-The heart of the Valley, an immediate personal escape to both world-class destinations that sits at 7, 500 feet of elevation and appeals to tourists for its stunning mountainous landscapes, world-class dining, and year-round activities such as festivals, concerts, etc.

That being said, Avon is considered a great location for a vacation rental, especially during ski season, and its affordability is relative to the pricing of Beavercreek and Vail.

Market Data:

• Average Daily Rate - $ 490
• Occupancy Rate - 55%
• Revenue - $ 5, 049

2. Breckenridge

The former mining town, Breckenridge, located at an elevation of 9,600 feet in Summit County is among the most visited and popular destinations in North America. More than that, this characterful town has won the hearts of tourists around the world known for its luxurious ski resort, its history, quirky museums, fine dining restaurants, and so much more.

Apart from that, this town is home to year-round activities such as fly fishing, hiking, and mountain biking, making it the perfect location to invest in a vacation rental home. Even with the off-season, owning a vacation rental home is still profitable with its year-round activities for travelers to enjoy from. Typically, a home might cost close to a million dollars however surrounding towns such as Dillon and Frisco offer slightly lower property values and a great location for an Airbnb investment.

November through April are the best times to visit when slopes are ready for skiing and snowboarding.

Market Data:

• Average Daily Rate - $ 392
• Occupancy Rate - 65%
• Revenue - $5, 060

3. Boulder

Just 30 minutes Northwest of Denver lay in the foothills of Colorado's Rocky Mountain Range, Boulder, a getaway destination that flocks travelers for its stunning landscapes, outdoor activities, and its intrinsic experience of the city itself. Though, keep in mind, that Boulder is not all about ski resorts and prides itself on locally sourced products.

Among the top attractions are Boulder Creek Path, Pearl Street Mall, Eldora Mountain Ski Resort, and so much more. Thanks to its reputation, Boulder is definitely worth a visit making it a great location for property investment. However, take note, that short-term rentals are restricted to a minimum of 30 days but this does not stop travelers from visiting this beautiful city and investors from potentially investing in this flourishing business.

Market Data:

• Average Daily Rate - $ 249
• Occupancy Rate - 83%
• Revenue - $ 3, 478

4. Colorado Springs

Just an hour's drive away from Denver is its fast-growing state- Colorado Springs, attracting visitors all year round from its historic sights and landmarks to its quality of life, nightlife, food, and fur-friendly environment.

More importantly, Colorado Springs offers great outdoor activities such as Ziplining, hiking, etc. Don't forget, it is home to the Air Force Academy and Olympic Traning Center, and is also known as a Military town. Among Colorado Spring's famous destinations are Pikes Peak (one of the highest peaks in Colorado accessible by car), the Garden of Gods, and the Cheyenne Mountain Zoo. March to May and September to October are the best time to visit Colorado Springs.

With that being said, vacation rentals in Colorado Springs are soaring rapidly and surprisingly property values are expected to be lower in comparison to Denver and surrounding suburbs due to its evolving large-scale urban development making the hospitality industry on the rise.

Market Data:

• Average Daily Rate - $ 175
• Occupancy Rate - 80%
• Revenue - $ 2, 968

5. Keystone

Known for its family-friendly retreat and charming ski resort village is what sets it apart from other resorts in the county offering plentiful activities from golfing to skiing, hiking, fishing, and more attracting tourists year-round. Whether it's snow falling or flowers blooming, Keystone is the destination to go to especially for travelers looking for a more affordable escape close to Denver.

6. Steamboat Springs

Do you love the outdoors? Or relish the hot springs? If yes, Steamboat Springs is for you! Located in Northern Colorado, deep in the Yampa Valley at an elevation of 6700 feet, is among the popular and major destinations for travelers and celebrities. This destination offers travelers the fine luxury of a spa retreat and is among the best ski destinations with six peaks to choose from. Though there are other activities and attractions such as enjoying a performance by the Steamboat Symphony Orchestra or visiting the Art Museum or trying dog sledding for the first time and so forth.

The only drawback is that property values are quite expensive ranging from $2,000 to $8,000 dollar condo to probably a million-dollar mansion. Apart from that, there are not many surrounding towns, making its properties competitive.

Market Data:

• Average Daily Rate - $ 401
• Occupancy Rate - 53%
• Revenue - $ 4, 167

7. Estes Park

Located in the heart of Rocky Mountain National Forest, 70 miles from Denver, Estes Park has been known for its fun-filled vacation where over 4.4 million tourists flock each year to enjoy adventure activities such as white water rafting, horseback riding, or driving through Trail Ridge Road and explore the picturesque landscapes over the Continental Divide to Grand Lake.

More importantly, the most popular visiting months are July, August, and September. That being said, Estes Park and its surrounding towns make it a great location for a vacation rental surrounded by forest and snow-covered landscapes.

Market Data:

• Average Daily Rate - $ 300
• Occupancy Rate - 62%
• Revenue - $ 4, 350

8. Palisade

Sitting in the heart of the Grand Valley, Palisade is a famous winery destination among travelers. It is also home to more than 25 local wineries boasting award-winning vintages, picturesque views, and tasting rooms.

Don't forget, that Palisade hosted one of the most upbeat wine events, Colorado Mountain Winefest which urges tourists to enjoy samples of cabernet to experience first-hand stomping grapes yourself.

Apart from that, Palisade offers local activities from historic farms to mountain bike trails and art exhibits.

Market Data:

• Average Daily Rate - $ 207
• Occupancy Rate - 68%
• Revenue - $ 3, 375

9. Pine

Do not underestimate this small rustic town, Pine, also known as Pine Grove, that sits in the foothills southwest of Denver. Pine is home to scenic mountain views with lots to offer to outdoor enthusiasts, history buffs, and tourists who enjoy fun-filled activities such as hiking, biking, pier fishing, etc.

Among the top attractions are Pine Valley Ranch Park, North Forth South Platte River, Chair Rocks, Cathedral Spires Park, and more.

Market Data:

• Average Daily Rate - $ 168
• Occupancy Rate - 81%
• Revenue - $ 2, 937

10. Denver

Known as the "Mile High City", Denver, nestles 5,280 feet above sea level. This thriving city boasts 300 days of sunshine and is home to its art, culture, history, and music. Moreover, Denver attracts tourists with its mountainous views, flourishing artisanal, craft food scene, and neighboring ski resorts.

That being said, Denver is a great location for investing in Airbnb as it offers a variety of sights and activities no matter who the target is, may it be lone travelers, adventure seekers, families, friends, couples, and so forth.

Market Data:

• Average Daily Rate - $ 171
• Occupancy Rate - 80%
• Revenue - $ 2, 839