All Forum Posts by: James Carlson

Quote from @Dayana Castellon:

• How do you get your listing to page 1 on you Airbnb ?

You're really asking how to create a vacation rental that outperforms the competition. 

Put out a good product. Full stop.

Unique style, ample amenities, good location, great photos, solid communication, etc etc. 

When I'm looking at Colorado STR potentials for our clients, and reviewing AirDNA numbers, it's not chance why the most profitable properties are what they are. The highest performing short-term rentals have a design eye, their photographs weren't shot by an amateur's iPhone, and they offer more than one extra that others aren't (hot tub, sauna, views...).

Create a differntiated Airbnb, and you'll outperform others ... be that first page or second or third.

@Steven Mendiola

Biggest advice for the house-hacker in Denver? Don't overthink it. 

I see too many people wait for a year to buy while they try to learn everything. Don't do anything exotic. Narrow down to some areas you like. Work with a house-hacking agent in Denver that seems to know enough and who's personality you can stand. Start seeing homes and buy in a few months.

The sooner you buy, the sooner you start the clock on lending to allow you to buy again. (You can't move earlier than a year and get another primary residence.)

If you buy a 4br in the $500k range and put 5% down, that's likely $3300/mo or so. You can rent a room for $800-$1000. Rent the three extra bedrooms and get $2400/mo. Save, save, save. Put that in a high-yield savings account, and in a year or two, buy again, rent the previous home and repeat the house-hacking in your new place.

After five years or so, you have maybe three places. Then you can get more creative if you want.

Now, within house-hacking, there are variables to consider. Duplex? Home w/ basement apartment? Straight-up rent-by-the-room? And also, what about buying in an area that allows for non-owner occupied STRs, so you can Airbnb or short-term rent the place when you move out? These are all ideas around the edges, but the big thing is to buy something that allows you to offset your mortgage with rent income and then save that for the next.

Anyway, good luck in your search!

Quote from @Michael Baum:

Hey @James Carlson. So I don't follow CO STR stuff other than basic reading posts here and some other places as well.

I hear you that we are talking about primary residence STRs but that can change just as fast as non occupied IMHO. Maybe never in CO but other areas have seen it happen.

Personally I am always trying to tell others that they need to look carefully in any area no matter how attractive the deals are.

I agree that you need to work with an agent who knows the lay of the land.

I get it, I was too vague not specific. 

Totally true. There's no guarantee of anything in the STR investing world, and I do think cities are legally allowed to switch their laws, so as soon as I say it's super unlikely to happen, that thing will then happen.

But again, not even the most liberal, affordable-housing-starved, anti-STR city in Colorado has changed their laws and not allowed those who were operating under a legal short-term rental license to continue.

Your point is well taken though. You should always know what you're getting into. And have a plan B and plan C. 

Quote from @Michael Baum:

Hey @Bruce Tieu, I kinda agree with @Tony SanFilippo on this.

Colorado seems to be always in flux, banned, not banned, restricted, banned again.

If you want to go this route, make sure it will cash flow as a LTR. 

 And also, it's important to point out that unlike some states that have a statewide allowance for STRs, Colorado has no statewide law. Airbnb and short-term rentals are regulated city by city, county by county.

So people unfamiliar with Colorado probably hear the drip drip of "Denver banned STRs," and "Colorado Springs allowed regulated Airbnb," etc. etc. But that's not the same as all regulations in Colorado are always in flux. They're not. 

Final point, for those savvy investors or second-home buyers who can find the pockets of Colorado that do allow them, you're getting an STR in a market where competition is artificially capped.

Quote from @Michael Baum:

Hey @Bruce Tieu, I kinda agree with @Tony SanFilippo on this.

Colorado seems to be always in flux, banned, not banned, restricted, banned again.

If you want to go this route, make sure it will cash flow as a LTR. 

I appreciate your thoughts on STRs in this forum. You're usually spot on, but this advice is based off myth more than reality. 

I've followed Airbnb laws across Colorado for eight years. It's totally accurate to say that more and more cities and counties are implementing regulations on vacation rentals. Many of them end up banning non-owner occupied STRs. 

But ...

1. I can't think of a Colorado city or county that has banned STRs in a primary residence, which is what OP is talking about doing.

2. More importantly, every municipality that allowed for Airbnb investment properties and then switched and banned them also grandfathered in existing licenses. (Littleton, where OP is buying, is an example of this.)

So as long as you work with an agent who knows the laws in and out (ahem, blatant self-promotion), and you buy in an area that currently allows non-owner occupied, you almost certain to be allowed to do so in perpetuity.

Quote from @Collin Hays:

My first reaction is, I've heard that Colorado municipalities tend to be STR-unfriendly. I would check with the city of Littleton before I did much more.

 Yeah, more and more Colorado cities and counties prohibit non-owner occupied STRs. (Almost all allow Airbnb in your primary residence even if they ban short-term rentals as an investment property.)

Littleton, just south of Denver, has been all over the map. First, they legalized Airbnb in non-owner occuped properties. Then, a year later, they reversed course. (A good example of why you should work with an STR-friendly agent who knows Airbnb laws in and out. ... ;))

Anyway, what OP is looking to do is legal in Littleton. Though there is a thought that if you're going to house-hack with Airbnb, you could choose one of the Denver area cities where they allow non-owner occupied short-term rentals. That way you Airbnb while you live there in that separate unit AND you can Airbnb it when you move out.

Congrats on the potential offer. Good luck with it.

A couple thoughts on your situation:

-- When I'm looking at AirDNA for our Colorado STR investors, I don't care about occupancy and daily rates for STRs as much as gross revenue. At the end of the day, it's about the money they're pulling in every year. 

-- The last client I had with an up-down house-hack near downtown Littleton did a mix of short-term rentals and midterm rentals. They don't have much of a problem getting either. 

-- Are the comps you're looking at all 3br/1ba? I see a big drop-off for Denver Airbnb properties that are 3/1 versus 3/2, so just make sure you have the right expectations.

-- I find using 1.3-1.4x the LTR numbers on Rentometer for your MTR/medium-term rental numbers is pretty accurate.

Big picture? Don't worry too much about the edges of the numbers. What matters is that you're about to buy a property that will help you offset your mortgage in a big way, shoring up your reserves that you can then use to buy another in a few years. That's huge. The big money is in the appreciation of a long-term buy and hold, so anything you can do to amass properties quicker is the thing. Congrats. 

@David S Roberts

I'd venture to say those nearby properties are just ignoring the law.

Most cities and counties in Colorado have well-defined STR requirements, and if you meet those, then you can operate a vacation rental.

Jefferson County is the only Colorado municipality I know that has some requirements but also gives discretion to approve a short-term rental permit over to a county board.

To your specific question, yes, the 1-acre requirement is likely a barrier for you and your neighbors.

The frustrating thing for a lot of Airbnb owners in JeffCo is that if you try to play by the rules, you could get shut down. (I had an STR investor client have their permit pulled for dubious reasons.) But if you just operate without a permit, the county does a poor job of coming after you. My guess is your neighbors are operating without a permit.

So there's an incentive to not even apply for a license.

Quote from @Nathan Gesner:

Quote from @Scott Trench:

We need to find a way to reward high quality, human generated content, and deprioritize low value posts to discourage workarounds. 

I agree. Something like a $1,000 bonus for every 5,000 posts? 

Two tickets to Cancun for every 20,000 posts?

Partial ownership in BP? 

Angling for equity, I love it.

Quote from @James Carlson:

...2. The info's flat wrong.
At least a lot of the time. The above linked post talks about Breckenridge, Colorado and Keystone as great options for a first-time short-term rental investor because they're "STR friendly." I...

Not to mention the absurdity of offering Breckenridge as a good option for a first-time Colorado investor (which the original poster was). I've been working with STRs and Airbnb investors for seven years. Not many thought a $3 million property was the best first investment.