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Buying an Airbnb Vacation Rental in Breckenridge

Buying an Airbnb Vacation Rental in Breckenridge

Have you ever imagined owning a piece of paradise in one of the most sought-after vacation spots in the United States? Breckenridge, Colorado, isn't just a premier location for ski enthusiasts, it's a lucrative opportunity for Airbnb hosts and property managers looking to expand their portfolios.

In today’s blog, we'll walk you through the essentials of buying an Airbnb vacation rental in Breckenridge from understanding the market dynamics to leveraging the best tools for maximizing your investment.

Why Start an Airbnb in Breckenridge?

According to Airbitics, Breckenridge is a top choice for Airbnb investments due to its status as a premier ski destination and a vibrant job market. The town attracts about 3 million visitors annually.

Breckenridge, nestled at the base of Colorado’s Tenmile Range, is celebrated for its superb ski resort and rich Gold Rush history. The town retains its historic charm with Victorian architecture and buildings now housing galleries, shops and eateries contributing to its reputation as one of America’s most picturesque towns.

It also offers vibrant festivals and activities year-round. Beyond Breckenridge, Colorado features stunning landscapes with 41 state parks and 26 ski resorts alongside cities like Denver and Colorado Springs, known for their thriving arts, music scenes and dynamic nightlife. Breckenridge's appeal goes beyond the winter. In the summer it's a haven for hiking, biking and fishing enthusiasts, which keeps your vacation rental in high demand.

Understanding the Breckenridge Housing Market

Vacation rental properties in Breckenridge vary in price significantly based on location and amenities and range from cozy condos to luxurious mountain homes.

Property earning potential in Breckenridge

According to AirDNA statistics, consistent tourist traffic and a strong rental market contribute to the high return on investment.

  • Annual projected revenue: $56.7K
  • Occupancy: 50%
  • Average daily rate (ADR): $310

Property rentals near Main Street or ski lifts tend to fetch higher rates and lower vacancy rates in Breckenridge. Choosing the right Airbnb property can significantly impact your Airbnb success.

Housing prices

According to Redfin, homes are currently selling for $914,400, a 5.3% increase from last year. Breckenridge's average home sells after 36 days on the market, significantly faster than the national average of 73 days.

Housing Market Competitiveness in Breckenridge

Sale-to-list price

Homes in Breckenridge typically sell for about 96.6% of their listed price, reflecting a slight increase of 1.5 percentage points year-over-year. This suggests that while buyers negotiate, sellers maintain a strong position.

Homes sold above list price

Only 4.8% of homes sold for more than their asking price, a marginal increase of 0.4 percentage points from the previous year, indicating that bidding wars are not common but do occur.

Homes with price drops

Approximately 18.2% of listings experienced price reductions, up 2.9 percentage points year-over-year. This increase could suggest that some homeowners initially set ambitious pricing in a competitive market.

Median sale price per square foot

The cost per square foot in Breckenridge has reached $932, marking an impressive 13.7% increase since last year. This metric further underscores the high value placed on property in this region, driven by its attractiveness as a prime vacation destination.

Market insights for potential investors

Breckenridge's vacation rental market is competitive but accessible for investors and individuals interested in purchasing a vacation rental. The steady growth in property values and a relatively quick turnover rate presents a promising opportunity for long-term investment, particularly for properties aimed at the thriving tourist sector.

Legal and Regulatory Considerations in Breckenridge

Before entering the Breckenridge real estate market, it’s vital to understand the local regulations governing vacation rentals. The town enforces specific zoning laws and mandates licenses for all rental properties. Adhering to these rules is essential for operating smoothly and avoiding fines.

Moreover, keeping up-to-date with any changes in short-term rental policies is key for safeguarding your investment and enhancing its profitability.

Short-Term Rental Caps and Zones

In Breckenridge, a short-term rental property is any residential dwelling unit or room that is available for lease for a term of less than 30 consecutive days.

To operate such a rental, these are the prerequisites

  • A valid short-term rental license is mandatory for each property, irrespective of the marketing method (via management companies, online platforms like VRBO and Airbnb, newspapers or even word of mouth).
  • The license number must be prominently displayed in all advertisements for the property.
Side note:

Short-term rental licenses are non-transferable and non-refundable in the event of a property sale.

  • Individual homeowner associations may also impose their own requirements, restrictions and covenants on short-term rentals.

Obtaining a Short-term Rental License

In Breckenridge, every short-term rental operator must obtain a valid accommodation unit license. The town caps the number of available licenses at 2,200, acquiring a license a competitive process.

Here's the fee structure based on the number of bedrooms in your rental unit:

  • Studio Unit: $75
  • One-Bedroom Unit: $100
  • Two-Bedroom Unit: $125
  • Three-Bedroom Unit: $150
  • Four or More Bedroom Units: $175

Additionally, an accommodation unit administrative fee was implemented on January 1, 2019, which must be paid upon obtaining or renewing your license:

  • Studio Unit: $25
  • One-Bedroom Unit: $30
  • Two-Bedroom Unit: $35
  • Three-Bedroom Unit: $100
  • Four or More Bedroom Units: $150

Licenses must be renewed annually, including submission of the applicable fees, to maintain compliance.

Advertising Requirements

When advertising your short-term rental, Breckenridge mandates that the town’s business and occupational license number be prominently displayed. This requirement ensures transparency and helps maintain regulatory compliance.

Operational Requirements

Operational regulations in Breckenridge include having a designated responsible agent for each short-term rental. This agent must be available 24/7 to respond to complaints within 60 minutes. The responsible agent can be a management company, a rental agent or an individual identified by the licensee such as a co-host.

Business and Occupational License Tax and Accommodation Unit Regulatory Fee

Acquiring a short-term rental license in Breckenridge requires the payment of the Business and Occupational License Tax (BOLT) and an accommodation unit regulatory fee, set at $756 per studio/bedroom per year. This fee structure was affirmed by Town Council ordinance No. 35 on November 23rd, 2021, ensuring that funds collected are utilized for:

  • Supporting the town's housing policies and programs such as buy downs, lease-to-locals programs, and the acquisition or construction of deed-restricted units.
  • Addressing the secondary impacts of the short-term rental industry like parking shortages, noise, and increased trash.
  • Covering the town's costs for staff and personnel needed for the administration and enforcement of these regulations.

Special Conditions and Local Taxes

All short-term rentals must comply with special conditions outlined in the Breckenridge Town Code, such as posting these conditions within five feet of the main entrance of the accommodation.

Guests staying in Airbnb rentals in Breckenridge will incur additional taxes. "https://www.townofbreckenridge.com/departments/finance/taxes/accommodations-tax#:~:text=The%203.4%25%20Public%20Accommodation%20Tax,Short%20Term%20Rental%20license%20holders).") included in their reservation cost:

Sales and accommodation tax

Owners who rent their properties on a short-term basis must collect and remit local and state taxes. Online platforms such as Airbnb and Vrbo have agreements with the Town of Breckenridge to collect and remit these taxes on behalf of the hosts. Despite this facilitation, a valid short-term rental license is still required for operation.

Public accommodation tax

3.4% of the listing price, including any cleaning fees, for reservations of 29 nights or shorter.

Sales tax

2.5% of the listing price, including any cleaning fees, for reservations of 29 nights or shorter.

Maximizing Your Investment with the Right Tools

To truly succeed in the competitive market of Breckenridge vacation rentals, leveraging advanced tools and software is a must. At Hostaway, we offer robust vacation rental software that supports hosts in managing multiple aspects of their rental business. From streamlining reservations and managing guest communications to automating daily operations and marketing your property, Hostaway can transform how you manage your investment.

Breckenridge's active and competitive market makes Hostaway an invaluable tool for hosts to ensure their properties are booked at optimal rates, manage the guest experience smoothly, and generate more revenue.

Final Thoughts and Tips for Prospective Buyers

Investing in a vacation rental in Breckenridge offers a compelling opportunity, but it requires careful planning and strategic decision-making. Assess each property carefully, considering factors like location, potential rental income, and upkeep costs. Always comply with local laws to ensure your venture into Airbnb hosting is successful and sustainable.

With the right approach and tools like Hostaway, you can maximize your investment, delight your guests, and enjoy the benefits of owning a vacation rental in one of Colorado’s most beautiful and active communities.

FAQs

1. What makes Breckenridge a prime location for an Airbnb investment?

Breckenridge is renowned as a leading ski destination, attracting around 3 million visitors annually. Its rich history, vibrant festivals and year-round outdoor activities create a high demand for vacation rentals, enhancing its investment appeal.

2. What are the typical earnings for Airbnb properties in Breckenridge?

According to AirDNA, the projected annual revenue for an Airbnb in Breckenridge can reach $56.7K, with a 50% occupancy rate and an average daily rate of $310. Properties near popular attractions like Main Street or ski lifts tend to perform even better.

3. What legal considerations must be considered when buying an Airbnb in Breckenridge?

It’s vital to understand local regulations, including needing a short-term rental license, which is mandatory for all properties. The town enforces specific zoning laws and there are caps on the number of licenses issued.

4. How competitive is the housing market in Breckenridge for potential Airbnb properties?

The Breckenridge real estate market is competitive, with homes generally selling for about 96.6% of their listed price and some properties going pending in as little as eight days. This dynamic market suggests a healthy demand for residential properties.

5. What are the key operational requirements for running a successful Airbnb in Breckenridge?

Operational requirements include having a responsible agent available 24/7 to handle any issues, prominently displaying the license number in all advertisements, and adhering to special conditions such as local tax collections and compliance with town regulations.

Ready to find out how Hostaway can transform your business?

Hostaway is proud to support thousands of Property Managers and Airbnb Hosts Around the world. We take pride in being Top Ranked in Vacation Rental Software Review Sites: Capterra, G2, Software Advice, Trust Pilot, to name just a few! Check out our reviews and read the Hostaway Case Studies from real successful and growing Short-Term Rental Managers!