Find how much how can make from an STR here

So you are thinking of opening a short term rental.  Whether you are planning to purchase a property for this, or turning your current home into one, there are things you need to know.

There are new regulations for STRs in Colorado Springs

As of 1/1/19 there are new regulations on STRs for Colorado Springs that every owner must follow.  They are as follows:

  • They must be operated out of lawful dwelling units
  • If your advertising your short term rental on websites other than AirBnB you will need to obtain a City Sales Tax License (AirBnB collects sales tax on the City’s behalf)
  • You must maintain weekly residential trash collection services.
  • You will need to provide proof of liability insurance in the amount of not less than $500,000.
  •  Properties must remain compliant with all planning, zoning, building, and other City codes.
  •  All short term rentals shall abide by all applicable noise, housing, and public health ordinances of the City and with all other City fire and safety ordinances.
  • Parking in private driveways shall be utilized first with overflow parking on the street where permitted.
  • You cannot host weddings or large social/commercial events at a short term rental
  • Short term rentals are required to have a 24-hour point of contact on file with the Planning Department who can respond within 1 hour in the case of an emergency.
  • Your short term rental permit is valid for 1 year

For more information on these regulations, you can check out the city website here.

What Type of Return Can You Expect?

The most important thing to understand about STRs is in most cities, they fluctuate on a seasonal basis.  This is one of the reasons they are much more comparable to hotels or bed and breakfasts than a long term rental property.  You will have a peak tourism season, where you can expect a much higher occupancy.  Based on research from the site www.airdna.co You can expect somewhere around 90% occupancy in the summer months, and somewhere around 50% occupancy in the winter months.  The average price per night in Colorado Springs sits between $100 and $150.  So in the winter months that would leave you with somewhere between $1500-2200 coming in to pay the mortgage, and other expenses on the home with.  In the summer months, it ends up being a home run with up to double that price range.

We would also recommend hiring a property manager to help manage your guests and properties on a day to day basis.  Because STRs have such a high turnover in tenants, there is much more of a need to have a company handle all repairs, tenant issues, and other maintenance concerns involved with the property.  On top of that, they also help to market the property, and provide good insights through experience in the industry.

Things to Remember in Order to Be Successful

As mentioned above, as a STR you are competing with hotels, bed and breakfasts, and other hospitality businesses.  That means you must think and act as a hospitality business.  It seems to be where people fall short is in how they market their STR and the amenities they provide.  You need to make sure how you market and describe your property makes it sound desirable to the average tourist visiting town.  This is what makes the difference between 50% occupancy and 90% occupancy.  People are likely visiting Colorado Springs because they want the outdoorsy Colorado experience, and you should keep that in mind when you are designing a theme for your property.  Ask yourself what will give my guests the best Colorado Springs experience?     

Click here to see how much you can make from opening a STR

If you would like more information on STRs, or if you are interested in opening one please contact us at:

719-231-1128

tysonliese@kw.com

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