All Forum Posts by: Ryan Riches

I'll add another stick to the House Hack fire here. I don't know exactly what your budget looks like, but I can bet that your housing expense is one of the biggest ones on there. If you can find a place that makes sense, you can put 3.5% down and rent out the rooms to roommates, or airbnb. This is what I am currently doing in Colorado to increase my savings rate to get another property. If you have a family you could look into duplexes, or single families that have a natural dividing point (basement, attic, cottage, mother in law suite), to keep your space more private while still getting the benefits of House Hacking.

One thing to keep in mind on top of the density rule: They are also voting on a regulation that would not allow you to rent your property out as an STR unless you occupy that property - Same rule that Denver has enforced. I thought they were supposed to vote on this one back on 10/22 but haven't seen anything new on it. Just like @Robin Searle and @James Carlson have said, have a backup plan for your properties. I would even say to make sure they will break even or cashflow if you had to transition them over to LTRs. 

Welcome to Colorado David! 

The contributors above definitely make some good points. Real estate in Colorado is not cheap, and it is difficult to find a property that cashflows. However, I don't think that means you shouldn't go for it. I purchased a single family house in 2017 and lived in it with my wife, then in 2019 we purchased another single family with a walkout basement. We rented our first house out and are house hacking using Airbnb on our current home with the exact model that @James Carlson just described. We lock the door to our basement and the guests use a separate entrance - We never see them!

The cashflow on our rental property is currently not significant, and we are self managing, but we are willing to take the risk currently as the market continues to appreciate and rents continue to climb year over year.

My recommendation would be to find a SFH with an area that you could close off to rent out on Airbnb, or find a duplex (harder) that you would be able to house hack while you live here, and cashflow when you leave.

If your goal is to create passive income quickly and avoid house hacking then I would suggest saving your capital for a market that could provide some better instant returns for you.

Good luck!

Welcome to Colorado Andrew! The entire front range (from Fort Collins down to Colorado Springs) is pretty hot right now. There are a lot of people that are moving down to Colorado Springs from Denver because it is a more affordable market. Multifamily units are in high demand and low supply across these cities as well. I'll second what @Justin Makkay mentioned. I purchased a single family house with a walkout basement and have house hacked with Airbnb! This has been a great strategy for us to cashflow the house that we are living in. Make sure you are up to speed on the STR regulations of the city you are looking into though.

I will second what has already been said here. Sounds like you live in a good area for Airbnb returns, we do Airbnb in our walk-out basement and it covers our housing expenses which has been stellar. However, our city (Colorado Springs) is starting to implement restrictions on STRs, and many fear that it could become a city that bans them altogether. We are making our plan B so that if further restrictions are put into place, we could transition over to LTR pretty easily. 

In our experience, setting up our property as a short term rental has been well worth it for the increased returns we have seen! I would say it is certainly worth starting out with short term and you can always switch if the city implements a ban, or if you simply don't like the amount of work involved. 

I will second what @Emilio Ramirez said here. Property in Colorado is highly localized. For starters, Gunnison and Ouray are very different cities with very different markets. In Gunnison, the closer you are to Crested Butte (Ski town), the more expensive your land is going to be. I would reccomend visiting many of these places and deciding where you would want to buy and build. I know for me and many in Colorado, would rather have a house on an acre near skiing and hiking, than 40 acres in the middle of a windblown mountain valley. 

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. 

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. 

Hey Bobby. The key word here is Estimate 

There are a lot of tools out there that will estimate your average nightly rate by month. But these can be inaccurate. 

I would recommend taking a look at what similar properties nightly rates are by month in your area. You will likely start out slightly below these rates to get your reviews up and increase your bookings. You can also find other STR hosts in your area and talk to them about the rates they usually get throughout the year.

I always want a property to cash flow with 50% occupancy. But your market may be different. 

Questions I have for you:

1. How do you plan to finance this deal? You will want to shop around banks if you plan to use the STR income to qualify.

2. What market is this in? Cities vary greatly in their nightly rates as well as their occupancy rates. Even within cities the STR market can be extremely seasonal.

 To second what JD said, I built my own spreadsheet after looking at the calculators on BP. It has definitely helped me to understand how all the numbers work together. On top of that, If there is something else I want to know, it is pretty easy to adjust the spreadsheet, and use it over and over and over as I analyze deals. 

JD actually helped my wife and I purchase our first deal earlier this year. He would be a great resource to you as you look to kick off your investing here in Colorado Springs.