Denver STR Market Overview
Denver sits at the intersection of two powerful STR demand drivers: it is the primary gateway city for Colorado's world-class ski resorts (Vail, Breckenridge, Keystone, Arapahoe Basin), and it is a thriving urban destination in its own right with a booming food and music scene, major league sports, and one of the busiest convention calendars in the Mountain West.
The city's STR market is unusual because Denver enforces a primary-residence-only rule more strictly than most major cities. This keeps supply artificially low relative to demand, which supports stronger ADRs and occupancy for the licensed hosts who are operating legally. It also makes Denver effectively off-limits for pure investment buyers looking to deploy capital into STR properties.
The practical opportunity for Denver STRs is clear: owner-occupants who rent their primary residence (or part of it) during peak ski weekends, sporting events, and summer tourism season can generate significant supplemental income with relatively modest operational effort.
Typical ADR Ranges in Denver
| Property Type | Off-Peak ADR | Standard ADR | Peak Season ADR |
|---|---|---|---|
| 1BR Condo / Apt | $90–$120 | $120–$155 | $180–$260 |
| 2BR Home | $120–$160 | $160–$210 | $240–$340 |
| 3–4BR Home (Popular Neighborhood) | $160–$220 | $220–$290 | $320–$480 |
Peak season includes ski weekends (Nov–Mar), major concerts at Ball Arena and Red Rocks, and summer outdoor recreation months. RiNo, Capitol Hill, and Highlands neighborhoods command premium rates.
Typical Occupancy Rates in Denver
- Ski season weekends (Nov–Mar): 80–92% — gateway demand from ski resort visitors seeking affordable base
- Summer (Jun–Aug): 72–82% — outdoor recreation, hiking, national parks proximity
- Event periods: 90–100% — Red Rocks concerts, major sporting events, large conventions
- Shoulder (Apr–May, Sep–Oct): 58–68% — pleasant but lower tourism volumes
- Annual average: 62–72% for well-managed licensed property in popular neighborhood
Estimated Profit Scenarios — Example Denver Property
| Metric | Conservative | Mid-Case | Optimistic |
|---|---|---|---|
| Annual ADR (blended) | $155 | $190 | $230 |
| Occupancy Rate | 55% | 65% | 73% |
| Gross Revenue | $31,100 | $45,050 | $61,300 |
| Platform Fees + Cleaning + Fixed | $22,000 | $25,000 | $29,000 |
| Net Profit (pre-tax) | $9,100 | $20,050 | $32,300 |
| Net Margin | 29% | 45% | 53% |
Assumes 3BR owner-occupied home, self-managed. Does not include mortgage costs. Add 14–18% for STR taxes (collected by Airbnb) and income tax on net profit.
Regulations Overview — Denver STRs
- Primary residence only: Denver strictly enforces that STR hosts must live in the property as their primary residence. Non-owner-occupied investment STRs are not permitted in Denver proper.
- Annual license required: Apply through Denver Community Planning and Development. Annual renewal, currently $25/year. License number must appear in all listings.
- Neighborhood caps: Some neighborhoods have caps on the number of STR licenses issued. Verify availability before relying on STR income from a new purchase.
- Taxes: Denver imposes a lodger's tax (10.75%) plus state and city sales taxes — total 14–18%. Airbnb remits most of these automatically, but hosts must register with Denver Treasury.
- Mountain towns nearby: If you're looking to invest in Colorado STR property without the primary-residence restriction, mountain towns like Breckenridge, Estes Park, and Durango operate under different rules — check each municipality.
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