Primary Resident Restriction

[Erik Martin]

Hey BP, 

I have been getting excited about the prospect of trying to find an area that doesn't require primary residency for an AirBnB property. I live in Colorado and our two big cities, Denver and Boulder, both require primary residency for short term rentals. Is there any way that you can quickly check the primary resident restriction for an area? Also how often are these laws changing these days?

Thanks guys, 
Erik

[James Carlson]

Hey @Erik Martin The laws surrounding Airbnb is probably my favorite topic, so here's more than you asked for.That's a million dollar question (maybe literally) for some people. I host little happy hour seminars twice a month talking about the Airbnb laws in Denver and surrounding areas. I'll PM you about the next one. 

As @Michael Greenberg lamented, there is no quick way to figure out which Colorado cities have a primary residence restriction or not. I wouldn't rely on the national sites to get Denver's Airbnb laws or any other city's regulations right. The devil is in the details. 

You asked how often these are changing. I know that almost every city on the front range is looking at it. Lakewood just started a study session on the topic. Arvada's planning department issued an opinion saying they're illegal. Edgewater put a moratorium on short-term rentals while they study the issue. Aurora passed a law in December similar to Denver's

All that said, you have options. I get a lot of people asking me about this, and here's what I say:

1. Have you already bought your primary residence in Denver? If not (or even if you have, and you'd be willing to move), you should look for a home with a basement apartment with a separate entrance or a home with a carriage house out back. You've got to set up certain searches to capture these on the MLS, but what's great about them is that you can rent out that basement apartment or carriage house full-time on Airbnb. It's the only way, in fact, you can rent a place full-time on Airbnb in Denver.

2. Consider Colorado Springs. I'm pushing Denver clients who don't want to buy a new primary residence to look in the Springs. They don't have any restriction as of now on short-term rentals, and their city council has shown no interest in addressing them further. (This makes sense, politically, as Colorado Springs is more conservative and tends to believe in stronger property rights for individuals than some other cities.) My brother-in-law just bought a place down there and is renting it on VRBO/Airbnb full-time. He's doing well with Air Force families and others visiting Garden of the Gods and Pikes Peak. Oh, Castle Rock has no restrictions, either. 

There is a caveat for cities that don't restrict Airbnb or short-term rentals is that they could always change. So when you're running your numbers, be sure to have an exit strategy. Either A) sell and get out or B) know that a long-term renter could cover your butt if need be.

3. Consider Fort Collins. They just passed a law to allow non-primary residence short-term rentals in certain pockets of town. Many of those pockets are near the university or old town I believe. That could be a good strategy.

Good luck!