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Updated over 2 years ago, 08/28/2022
- Real Estate Agent
- Denver CO | Colorado Springs, CO
- 2,558
- Votes |
- 2,335
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Airbnb investment property in Denver, Colorado
I want to shout out a client of mine -- Stephen Rozo -- who's crushing it with an Airbnb investment property in Denver that he bought this summer. His goal is to move to Denver at some point in the next few years, but he wanted to buy before prices got too hot. I worked with him to find a short-term rental in one of the few Denver metro areas that allow STR investment properties. Five months on now, and he's killing it. (Pics at the bottom.)
Big picture
He's cash flowing $4,575/mo by managing it himself. If he handed it off to a full-service STR management company -- assuming a 25% fee going to them -- he'd cash flow $2,235.
More details
The purchase
We track the Airbnb laws in Colorado closely and just last year three cities actually opened up their rules to allow non-owner occupied short-term rentals. We looked in Arvada and Wheat Ridge -- two of the Airbnb-friendly Denver area cities -- and finally found a nice 4br/2ba home on the west side of Wheat Ridge, close to Golden and the foothills and with a big private yard and close to a park.
This was the crazy hot summer of 2021 when things were going for well over asking. Luckily, Stephen understood the potential revenue and was aggressive and picked it up
Close price: $570,000
He closed in late May, spent a month furnishing it and went live on Airbnb on July 1, 2021.
The revenues & costs
$9,375 -- average monthly gross income through the first four months.
($4,800) -- average costs through first four months. That's everything -- utilities, cable/internet, Airbnb fees, lodger's tax, etc.
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$4,575 -- cash flow
One caveat
One big caveat to that cash flow is that his first four months were some of the hottest months for Airbnb in Denver and Colorado in general. That will go down during the winter months.
Why he's succeeding
The biggest reason is simple: He owns an Airbnb in a STR-friendly city in the one of the hottest destinations in the country (Denver). But beyond that, he did a couple things very well:
- He bought nice furnishings. They're modern and clean. (See pics below.)
- He paid for good photographs. (Again, see pics below.) Sooooo important! Pictures are the number one driver of booking. Why would you leave that to your crappy smart phone pics? Guests click through an average of five photos before deciding to either keep going or move on. Pay for high quality HD photographs. Okay, I'll get off the soapbox now.
- He made the basement into a game room with foosball and a ping pong table. That's inviting to families visiting with kids.
- He highlighted an inviting outdoor space. He put up cafe lights on the back porch and had a nice photograph of that area. Colorado has amazing weather most of the year and people will want to enjoy it.
Pictures