Looking for best CO towns for STR investments

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Looking for best CO towns for STR investments

Heather Hall
Rental Property Investor · Fallbrook, CA (San Diego area) · Member since 2019 · 98 posts · 29 votes

Hello- I am new to CO and looking to buy a property for STRs (vacation rentals and furnished corporate housing for 30-90 days). I will initially occupy the residence for at least one year as my primary residence.

I was initially thinking CO Springs but I would like to find a town/ city with milder summers and:

1- will appeal to vacationers or renters/ relocating families during all seasons

2- TH or SFH is ideal so I can avoid condo fees (but I'm open to suggestions)

3- A town that does not completely turn into a ghost town after ski season

4- Affordable/ good ROI (anyone have advice for determining ROI using mashvisor vs AirDNA vs other methods ?)

* I have read Winter Park might be a good option? Any thoughts? Frisco? Dillon?

In the Colorado Springs area, Woodland Park is my favorite due to cooler weather and Pike’s Forest. Would this be a good spot for a vacation rental?

Any other thoughts? Thanks!

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Robin Searle
Real Estate Agent · Colorado Springs, CO · Member since 2017 · 224 posts · 201 votes
7y

@Heather Hall I have a triplex in Old Colorado City in the Springs with one of the units being used as an STR. It is EXTREMELY successful and booked solid right now. Even over the winter when we were just starting, I was very happy with the amount of bookings. I'm finishing up a partially finished studio on the property and will do STR from there and also plan to convert the long term rental to STR once my tenant finds another place. I am finding that LTR and STR on the same property doesn't really work. If you want more info on my personal experience, please feel free to PM me! You should be aware of the current city regulations as well as upcoming possible changes and have a back up plan (which can be said for any investment!)

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  • Neil Henderson
    Specialist · Carolina Beach, NC · Member since 2016 · 390 posts · 496 votes
    7y

    Hi Heather,

    Welcome! 

    Some thoughts:

    1- Look for towns with colleges and major hospitals. Traveling professors, students, parents, nurses, patients, patient families all have a need for short term furnished rentals. Colorado Springs would seem to fit that bill.

    2- I would avoid properties smaller than 2 bedrooms if you can. Tough to make the numbers work with a 1 bedroom. You'll be booked a lot, but you'll be fighting the lower end of the market to maintain your price. Toughest part about condos and townhomes are they are frequently in associations that are hostile to short term rentals. You never know when the board is going to change the rules on you. 

    3- Outside my expertise

    4- AirDNA is where I look. Look for comparable properties and get a feel for how often they are booked and what their average price is. Be conservative in what you think you can get!

    Zeona McIntyre and Michael Sjogren are two people who would be good to reach out to. Especially Zeona as I know she's very familiar with the Colorado market.

    Good luck!

    3Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    7y

    I guess you need to figure our your budget. I have read that Breckenridge is very popular but the median home price is nearly 700k. STR nightly is quite high.

    Once you have your budget, then you can rule out places that are out of range. I figured out our budget then search for the area's that I could afford that would also bring in good revenue.

    2Reply
  • Heather Hall
    OP
    Rental Property Investor · Fallbrook, CA (San Diego area) · Member since 2019 · 98 posts · 29 votes
    7y

    @Neil Henderson Such good info! Thank you!

    0Reply
  • Heather Hall
    OP
    Rental Property Investor · Fallbrook, CA (San Diego area) · Member since 2019 · 98 posts · 29 votes
    7y

    @Michael Baum thanks for responding! Yes . . . Budget. Sadly, a lot of those ski towns I have my eye on are out of my budget unless I am okay with purchasing a condo. Fluctuating condo fees and the unpredictability of such give me pause and hesitation on the condo front. Also as @Neil Henderson pointed out, STR rental rules are more strict in those types of HOAs.

    SFH might be the best bet- and as you said - I will likely have to yield to my budget to determine the rest. It's tough because there are a few places that will work but figuring out the best town feels tricky!

    0Reply
  • James CarlsonBusiness Member
    Real Estate Agent · Colorado | stan.store/JamesCarlson · Member since 2014 · 2k+ posts · 2k+ votes
    7y

    @Heather Hall

    Congrats on taking a big step. We work with a lot of clients looking for Airbnb and short-term rental properties in Colorado Springs, so take what I say with a grain of salt because. That said ... we like Colorado Springs. 

    Woodland Park is certainly interesting, but I worry about the winter month slump. When the summer hiking and family reunion time is done, what is the draw of that town? Colorado Springs still has hospitals, several colleges/universities. And most importantly, Colorado Springs has favorable STR laws.

    Definitely steer clear of HOA-governed places. If they don't already have prohibitions on STRs, you never know when they might try.

    And then -- and this will seem self-serving -- be sure to work with an agent who understands the laws and zoning and has some knowledge of what homes and areas make for a good Airbnb.

    Good luck! 

    [email protected]720-460-1770
    James Carlson Real Estate
    WebsiteView Page
    2Reply
  • Robin Searle
    Real Estate Agent · Colorado Springs, CO · Member since 2017 · 224 posts · 201 votes
    7y

    @Heather Hall I have a triplex in Old Colorado City in the Springs with one of the units being used as an STR. It is EXTREMELY successful and booked solid right now. Even over the winter when we were just starting, I was very happy with the amount of bookings. I'm finishing up a partially finished studio on the property and will do STR from there and also plan to convert the long term rental to STR once my tenant finds another place. I am finding that LTR and STR on the same property doesn't really work. If you want more info on my personal experience, please feel free to PM me! You should be aware of the current city regulations as well as upcoming possible changes and have a back up plan (which can be said for any investment!)

    5Reply
  • Ken Latchers
    Hatfield, PA · Member since 2012 · 1k+ posts · 629 votes
    7y

    my schtick is to find a reasonable tourist town with affordable housing. Paying a lot of money often gets you not sufficient Revenue for the effort.

    0Reply
  • Teri Feeney Styers
    Real Estate Agent · Grand Junction, CO · Member since 2015 · 1k+ posts · 736 votes
    7y

    @Heather Hall - Grand Junction area. University, good hospital, big tourist destination, milder weather than the front range and cheaper prices. 

    2Reply
  • Ryan Riches
    Real Estate Broker · Denver, CO · Member since 2018 · 87 posts · 66 votes
    7y

    Hi Heather! Welcome to Colorado!

    I operate 4 STRs here in Colorado Springs and have had a similar experience to Robin. Booked solid. It is the second most visited city in the state next to Denver (which is not a friendly STR market).

    We have been seeing very strong cashflow, especially in the summer months. A lot of people visit year round since we have 3 large Universities (USAF, UCCS, CC) as well as large hospitals, and several military bases - this leads to a lot of visiting family. While summer is the hottest, the winter can be great as long as you are in the right location. 

    All of our units are SFH, which has worked out great for the demographic visiting the city!

    As far as ski towns go, you are sure to pay a much higher price to get into the market, and have stricter regulations. I find that most ski town STRs have very high rates in the winter, moderate rates in the summer, and lowest rates on the shoulder seasons (March-May, Oct-Nov). On the front range and in Colorado Springs specifically, we see higher rates in the summer and lower in the winter. From my experience, this is just a part of being in Colorado. This being said, Colorado Springs doesnt have as significant of nightly rate swings as a ski town would. 

    I know you mentioned milder summers than what you would have in COS. Not sure what part of the country you are coming from, but we have had only a handful of days above 90 degrees this summer, and the nights cool off into the mid to low 50s. With that, we rarely need to turn on our AC but for maybe a couple weeks in early August. 

    The city also provides great potential for ROI as the city has been rapidly expanding, but housing prices are still much more affordable compared to other cities on the Front Range and in the mountains.

    Good Luck! Feel free to PM me if you want to connect more. 

    1Reply
  • Heather Hall
    OP
    Rental Property Investor · Fallbrook, CA (San Diego area) · Member since 2019 · 98 posts · 29 votes
    7y

    @James Carlson thanks so much for the insights. It is impressive to me how I could do months of research OR ask someone experienced in the area and get a paragraph that tells me much more! Thank you!

    0Reply
  • Heather Hall
    OP
    Rental Property Investor · Fallbrook, CA (San Diego area) · Member since 2019 · 98 posts · 29 votes
    7y

    @Robin Searle thank you! I can PM you later with more specifics, but for now, do you think it would be possible for me a duplex or triplex owner to live in one unit and have the others rented out as furnished rentals for traveling nurses, military, etc. . . . But I would remain incognito as the property owner? Meaning, I would hire a property management company to manage it, never interact with the tenants myself AND not have the tenants know that I am the owner?

    For now, I only have time to own an investment property and not manage and I imagine if the tenants knew the owner lived on site, it might get confusing for them to know who to answer their requests or complaints.

    0Reply
  • Heather Hall
    OP
    Rental Property Investor · Fallbrook, CA (San Diego area) · Member since 2019 · 98 posts · 29 votes
    7y

    @Ken Latchers - Thanks Ken! I think what I'm seeing so far in CO Springs is that it has a good blend of both tourism and jobs, so that I would have the flexibility of STR for furnished/corporate housing or vacation rentals.

    And, thankfully, it is affordable. I’m so new to CO, however, I’m inevitably wondering . . . “Is there something better out there?”

    I suppose at some point, we just have to make a decision.

    0Reply
  • Heather Hall
    OP
    Rental Property Investor · Fallbrook, CA (San Diego area) · Member since 2019 · 98 posts · 29 votes
    7y

    @Teri S. Thanks Teri! I actually visited there last summer along with Ouray, Telluride, Ridgway, and Dolores. It was a brief trip . . . Was GJ as scenic as CO Springs?

    0Reply
  • Heather Hall
    OP
    Rental Property Investor · Fallbrook, CA (San Diego area) · Member since 2019 · 98 posts · 29 votes
    7y

    @Ryan Riches Such good info! Thanks Ryan! I am also hoping to stick to SFH, largely because when I travel, those are the vacation rentals I seek and also because for each one I purchase, I plan to live there first, making it my primary residence.

    I did not realize COS was the 2nd most visited city! That is great news and it sounds like COS is more STR friendly than other cities might be.

    I’m infinitely happy to have an absence of humidity since the Northeast US summers or Southeast or FL summers are my least favorite! I visited COS last fall so I wasn’t prepared for 90 degree days. Altitude + sun is going to take me some getting used to! But I do know I will like the mild COS winters!

    Which COS locations are the best for winter rentals? The "right location?" Also, do you think the small SFH in CO city with 2 or 3 beds and 1 bath would make a good vacation rental? Or are they too small?

    0Reply
  • Teri Feeney Styers
    Real Estate Agent · Grand Junction, CO · Member since 2015 · 1k+ posts · 736 votes
    7y

    @Heather Hall - we have the Colorado National Monument and the Grand Mesa and Bookcliffs. Fruit orchards, river, downtown Main Street, yeah... very scenic. I'm sure if you google us you'll come up with all sorts of visuals. 

    0Reply
  • Robin Searle
    Real Estate Agent · Colorado Springs, CO · Member since 2017 · 224 posts · 201 votes
    7y

    @Heather Hall - I think you could absolutely live on the property and rent out another unit without personally managing it. I use Hoste to manage mine and I can't recommend them highly enough. Do have a back up plan like moving to corporate/traveling nurse rentals that are over 30 days or simply long term rentals. The Springs just put regulations with licensing in place and there are some on the city council who would love to restrict or eliminate STR's. Also the El Paso County Assessor is looking into changing the zoning of STR's to commercial (he assured me nothing before 2021) which would vastly increase the property tax. Always have an exit strategy or make sure to run the numbers and see if your property can be utilized in other ways and still work for you financially. I'm loving our STR and will keep it going as long as as it's legal and financially viable. I love sharing our beautiful city with people from other states and I think STR's are an incredible way to travel - they are my family's personal choice when we travel!

    0Reply
  • Heather Hall
    OP
    Rental Property Investor · Fallbrook, CA (San Diego area) · Member since 2019 · 98 posts · 29 votes
    7y

    @Teri S. Thank you! I didn’t mean to imply it wasn’t a beautiful city, I just meant, does it have the same mountainous draw that Colorado Springs does?

    I do remember last summer reading that Mashvisor Rated Grand Junction as one of the best cities for LTRs in the nation!

    0Reply
  • Ken Latchers
    Hatfield, PA · Member since 2012 · 1k+ posts · 629 votes
    7y
    Grand Mesa, CO Natl Monument, Dinosaur, Black Canyon of the Gunnison... my grandparents lived in Grand Junction for decades. I have great memories growing up when we visited them

    Originally posted by @Teri Feeney Styers:

    @Heather Hall - we have the Colorado National Monument and the Grand Mesa and Bookcliffs. Fruit orchards, river, downtown Main Street, yeah... very scenic. I'm sure if you google us you'll come up with all sorts of visuals. 

    1Reply
  • Ken Latchers
    Hatfield, PA · Member since 2012 · 1k+ posts · 629 votes
    7y

    Dupl

    0Reply
  • JD Gunter
    Investor · Ocala, FL · Member since 2018 · 144 posts · 101 votes
    7y

    @Ryan Riches has a lot of experience doing STRs in Colorado Springs, so he's a great resource. 

    I only want to add that Woodland Park and Colorado Springs are very different markets. They share an MLS, but that is where the similarities end. Woodland Park has a much more sleepy, mountain town feel while Colorado Springs is booming with growth and industry.

    1Reply
  • Teri Feeney Styers
    Real Estate Agent · Grand Junction, CO · Member since 2015 · 1k+ posts · 736 votes
    7y

    @Heather Hall not sure how to compare the "mountainous feel" of the two. We definitely have an outdoor vibe - and are a reasonable drive to winter activities. But GJ is warmer - no blizzards. Lots of hiking - biking - hunting - camping - that sort of thing... RV parking at houses is almost a "must" - everyone has a big boy toy of some sort. 

    0Reply
  • Ryan Riches
    Real Estate Broker · Denver, CO · Member since 2018 · 87 posts · 66 votes
    7y

    Thanks @JD Gunter! And @Heather Hall in terms of best areas of town for year round traffic, Downtown, Old Colorado City, and Manitou are going to be your best bets. 

    0Reply
  • Heather Hall
    OP
    Rental Property Investor · Fallbrook, CA (San Diego area) · Member since 2019 · 98 posts · 29 votes
    7y

    @Ken Latchers. Thanks!

    I actually watched a great video tonight about Black Canyon! I had no idea there was so much boating!! It was beautiful!

    0Reply
  • Heather Hall
    OP
    Rental Property Investor · Fallbrook, CA (San Diego area) · Member since 2019 · 98 posts · 29 votes
    7y

    @JD Gunter thanks for the info. It seems that Woodland Park might be more of a LTR location whereas COS works for STRs or LTRs- correct?

    I plan on living in the property I purchase for 1-2 years before renting it out or turning it into a vacation rental. Woodland Park appeals to me on a personal level because it is quieter and about 6-10 degrees cooler than COS in the summer (I’m not a summer person).

    I am a very new investor so I am trying to balance my personal desires for a home I like, with what future tenants/vacationers will like.

    I welcome your thoughts/ advice.

    0Reply
  • Heather Hall
    OP
    Rental Property Investor · Fallbrook, CA (San Diego area) · Member since 2019 · 98 posts · 29 votes
    7y

    @Ryan Riches - thanks! Does Old Colorado City have less of a flooding concern than Manitou Springs? Also, would you say OCC has a better ROI due to Manitou property prices (and flood insurance premiums)?

    0Reply
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