Pueblo, CO-Short Term or Long Term?

Question

Hello all!

This is my first BP post! I look forward to anyone's insight on this.

I am looking to take the plunge on investing and have been looking at Pueblo, CO for some time now. I know that as prices rise in Colorado Springs people are moving further south to avoid the price hike, and Pueblo offers much less expensive options. I have a friend that recently purchased a 6 bed 3 bath property there and uses it as a short term place via Airbnb. He has reportedly made 3x his mortgage payment in the first month and is trying to convince me that this is the way to go if I invest in Pueblo.

Here are my issues with this. I am a Denver, Colorado native and Pueblo has never really been a "vacation" place and that's how I see Airbnb. We use companies like that to find cheaper options while on vacation rather than a resort. So what is bring people to Pueblo, CO to spend time off of work? If people are leaving CO Springs to move to Pueblo then they are looking to relocate, not rent an Airbnb and hang out for a weekend.

Am I missing something or is long term rental the better option here?

Adam Christopher Zaleski · Answer

Eric,

I moved to Pueblo West, CO in August 2019 and I love it. I actually moved to Pueblo West from Kauai. That is how much I love it. We were a little too far from home with a 4-year old. My wife's parents live in Castle Rock (1.5 hours away). We kept our house on Kauai as a long-term rental. We stay at our house on Kauai when we are in between tenants. Now we have the best of both worlds.

I am personally not going to buy any long-term rentals in Pueblo that falls within the district 60 school district. I apologize if this offends anyone. I'm going to be buying long term rentals in Pueblo West in school district 70. We have a 4-year old in district 70 and we are very happy with the overall educational experience.

In a nut shell, Pueblo West is what Denver was 25-30 years ago. Affordable housing, tons of sunshine, low property taxes, low sales tax, no traffic in town and no traffic to the mountains. My biggest complaint is that we are 2 hours to DIA. However, the Colorado Springs airport has been expanding and we occasionally fly out of COS now.

Chris Pasternak · Answer

Lake Pueblo is the largest attraction in the immediate area.  It really is something special and a bit of a hidden gem.  Pueblo extends all of the "seasonal" activities for Coloradoans because of the milder winter.  I've ran into groups of mountain bikers from Colorado Springs for example in winter months here.

Don't forget that "vacation" isn't the only reason people travel.  You've got conventions, state fair, chili fest, Southern Colorado hub,  and of course temporary work.

Adam Christopher Zaleski · Answer

@Danielle Dunn I have lived in Pueblo West since November 2019. I don't think anything has changed regarding the rules of STR. They don't have a team of people that scrub the internet trying to discourage it. However, it's technically still not permitted. I was communicating with someone in 2023 that called Pueblo County to try to get some specific answers regarding STR. They didn't get any useful information.

Pueblo is currently recreational river area near City Park. It's pretty amazing. It's supposed to be done later this year. It's going to be a great summer attraction.

https://www.kktv.com/2024/07/16/river-surfing-coming-pueblo/

Koren Lavi · Answer

Hey @Eric Honas, I just want to make the point that be careful listening to others regarding their investment properties/airbnbs. People like to paint a pretty picture about how their investment is going.

You definitely need more than a 1 month history to determine if the airbnb is successful. You should have an agent with access to AirDNA to get a better idea or income. If your friend recently made 3x his mortgage, but it was a spring/summer month, he could easily struggle to cover the rent in the fall and winter months.

Also if he is just taking PITI into the equation, he is missing/withholding info about utility costs, stocking/supply costs, cleaning costs, etc.

Definitely be VERY diligent with your underwriting on a deal like this.

Danielle Dunn · Answer

Would love to check in and see if you ended up moving forward with the Airbnb or long term rental in Pueblo West, Eric. I am looking at a few properties in Colorado Springs and Manitou area but came across something in Pueblo West (new to the Pueblo market) that I would like to do the BRRRR method on. Would love to hear how things have changed in the last 3 years and to see if Airbnb is a viable option or if I should go straight to long term.

Eric Honas · Answer

Thank you all for the input!

Robert Herrera · Answer

@Eric Honas

Airbnb works well in pueblo. I had a “420” friendly house on there and it did well until the pandemic. I rented it long term but the market for Airbnb has gone up. Not enough hotels to hold everyone. Not enough houses either

Castro Erick · Answer

Hello,

Chiming in here. I was actually in Pueblo, CO last year for 4 months due to work, and I agree with what people are saying on this post.

If you are thinking of buying and holding, Pueblo West is your best bet. DownTown Pueblo has a lot of beauty and potential, but there are a lot of vacancies when it comes to commercial buildings, there is not much variety for restaurants, coffee shops, shopping districts, etc.

I don't see AirBNB being the best right now, but who knows. Maybe later on it will be, However, I don't foresee it in the near future.

If you are in Pueblo, or need to speak to someone that is well connected with the city check out MATT & JENNY SMITH from WAKE UP PUEBLO. They are dear friends of mine, tell them CASTRO mentioned them from a Bigger Pockets forum.

Hope this helps.

Eric Honas · Answer

Thank you for the input!

I didn't think of how challenging it may be to find good tenants. Good to know!

As far as the activities available in the area, it seems like most of them would be seasonal. Once winter hits I'm assuming the water activities die down quite a bit.

I worry about the vacancy rate with an airbnb versus the steady income of a signed lease Pueblo specifically.

Rick Thomas · Answer

If you could find something relatively inexpensive around the downtown area for those wanting to experience the Riverwalk then it may be a great option. Fix and flip and rental properties are the better strategy in Pueblo. And yes we have some people commuting from Pueblo to the Springs because of the disparity in prices.

Pueblo, CO-Short Term or Long Term?

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