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Exploring Short-Term vs Long-Term Denver Rental Properties

Are you considering investing in Denver’s rental market? Property owners in the Mile High City face a critical decision: should you go with short-term or long-term rentals? While short-term rentals can generate impressive revenue (averaging $12,249 monthly with $125 daily rates), they come with challenges including 37% average occupancy rates and strict licensing requirements.

Meanwhile, the long-term rental market offers greater stability and predictable income streams, which explains why many landlords have pivoted away from vacation rentals since the pandemic. This article breaks down the key differences between these strategies to help you make an informed choice in Denver’s competitive real estate landscape.

Comparing Short-Term vs Long-Term Rentals in Denver

Understanding Denver’s Rental Property Market

Denver’s rental property market presents distinct opportunities in both short-term and long-term segments with unique dynamics shaped by local economic factors and housing demand.

The Denver rental market shows significant variations between property types and neighborhoods:

  • Average long-term rental rates increased 14.3% year-over-year
  • Occupancy rates for long-term rentals maintain 95% stability
  • Short-term rental occupancy fluctuates between 65-85% seasonally
  • Downtown Denver properties command 20% higher rental rates
  • Suburban areas demonstrate 8-12% annual appreciation rates
Property Type Average Monthly Revenue Occupancy Rate
Long-term $2,100 95%
Short-term $3,800 75%

Regulatory Environment

Denver’s rental regulations create specific requirements for property owners:

  • Long-term rentals require:
    • Basic rental license
    • Annual property inspections
    • Standard lease agreements
    • Safety compliance certificates
  • Short-term rentals mandate:
    • Primary residence requirement
    • Business license acquisition
    • Lodger’s tax collection (10.75%)
    • Liability insurance coverage
    • Regular safety inspections
Requirement Type Long-term Cost Short-term Cost
Annual License $50 $250
Insurance $600/year $1,200/year
Inspections $150/year $300/year

Property owners face stricter oversight in short-term rentals with quarterly compliance reviews compared to annual reviews for long-term properties.

 

Short-Term Rental Properties in Denver

Short-term rentals in Denver operate under specific regulations with an average daily rate of $125 and monthly revenue potential of $12,249. These properties serve travelers seeking alternatives to traditional hotels while exploring Denver’s urban attractions and nearby Rocky Mountains.

Denver’s short-term rental regulations establish clear operational parameters for property owners:

  • Properties must be the owner’s primary residence
  • Rentals must last less than 30 consecutive days
  • A valid STR license is required for all properties
  • Non-owner-occupied properties are prohibited from short-term rental use
  • Regular property inspections are mandatory for license compliance

Revenue Potential

Short-term rental properties in Denver generate varying income based on several factors:

Metric Value
Average Daily Rate $125
Monthly Revenue $12,249
Occupancy Rate 37%
Peak Season Rate Increase 20%

Location impacts revenue opportunities:

  • Downtown properties command premium rates
  • Properties near tourist attractions earn higher daily rates
  • Seasonal fluctuations affect booking frequency
  • Special events drive temporary rate increases

Management Responsibilities

  • Regular property maintenance scheduling
  • Guest communication management
  • Cleaning coordination between stays
  • Pricing strategy adjustments
  • Platform listing optimization
  • Booking calendar management
  • Property inspection compliance
  • Tax collection administration
  • Guest screening protocols
  • Emergency response availability

 

Long-Term Rental Properties in Denver

Long-term rentals in Denver provide a reliable investment option with stable income potential. These properties maintain a consistent 95% occupancy rate with rental rates increasing 14.3% year-over-year.

Tenant Rights and Regulations

Long-term rentals operate under specific tenant protection laws that regulate:

  • Security deposit handling with strict documentation requirements
  • Eviction procedures following Colorado state guidelines
  • Rent increase notifications with 60-day advance notice
  • Lease termination protocols protecting both parties
  • Property maintenance standards meeting local codes

Steady Income Benefits

Long-term rentals deliver predictable financial returns through:

  • Monthly income stability from 6-12 month leases
  • Reduced vacancy losses due to longer tenant stays
  • Lower operational costs with less frequent turnover
  • Minimal marketing expenses between tenants
  • Consistent cash flow for mortgage payments

Property Management Considerations

  • Tenant screening processes for reliable occupants
  • Regular property inspections on a quarterly basis
  • Maintenance scheduling during occupied periods
  • Lower hands-on management requirements
  • Strategic placement in residential neighborhoods with amenities
Long-Term Rental Metrics Value
Average Occupancy Rate 95%
Annual Rent Growth 14.3%
Typical Lease Length 6-12 months
Turnover Frequency 1-2 years

 

Financial Comparison

Denver’s rental market presents distinct financial opportunities for property investors. Short-term rentals offer higher potential daily rates while long-term rentals provide steady monthly income streams.

Return on Investment

Short-term rentals in Denver’s prime locations like Capitol Hill, LoDo and the Highlands generate premium nightly rates. The revenue peaks during summer months and ski season, with downtown properties earning 20% higher rates than other areas. Long-term rentals maintain a stable 95% occupancy rate with predictable monthly income from 6-12 month leases.

Rental Type Average Occupancy Peak Season Premium
Short-term 65-85% seasonal +20% downtown rate
Long-term 95% year-round N/A

Operating Costs and Fees

Short-term rentals incur higher operational expenses:

  • Daily cleaning services
  • More frequent maintenance
  • Higher utility costs
  • Marketing expenses
  • Property management fees (if applicable)

Long-term rentals involve lower recurring costs:

  • Annual maintenance
  • Reduced cleaning frequency
  • Tenant-paid utilities
  • Minimal marketing needs
  • Lower management overhead

Tax Implications

Short-term rental tax considerations:

  • Property tax assessment impacts
  • Lodging tax requirements
  • Business income reporting
  • Depreciation deductions
  • Expense documentation
  • Standard property tax rates
  • Rental income reporting
  • Maintenance deductions
  • Mortgage interest claims
  • Capital gains considerations

 

Key Factors for Property Owners

Property owners in Denver face distinct considerations when choosing between short-term and long-term rental strategies. These factors directly impact investment returns and operational success.

Location and Property Type

Location determines rental property success in Denver’s diverse neighborhoods. Long-term rentals perform best in stable, family-oriented areas with access to schools, parks and public transportation. Short-term rentals generate higher returns in tourist hotspots like Capitol Hill, LoDo and the Highlands where temporary housing demand remains strong.

Property Types by Rental Strategy:

  • Long-term rentals
  • Single-family homes
  • Duplexes
  • Triplexes
  • Fourplexes
  • Short-term rentals
  • Downtown condos
  • Urban apartments
  • Vacation homes

Time Investment Required

Short-term rentals demand significant ongoing time commitment for:

  • Daily guest communications
  • Regular cleaning coordination
  • Frequent maintenance checks
  • Marketing management
  • Check-in/check-out procedures

Long-term rentals involve periodic tasks:

  • Monthly rent collection
  • Annual lease renewals
  • Quarterly property inspections
  • Basic maintenance scheduling

Risk Assessment

Short-term rental risks include:

  • Seasonal occupancy fluctuations (65-85%)
  • Higher property wear and tear
  • Complex regulatory compliance
  • Increased liability exposure
  • Property tax assessment impacts
  • Extended vacancy periods between tenants
  • Potential property damage from long-term use
  • Tenant default on payments
  • Fixed rental rates during lease terms
  • Limited flexibility for property updates

 

Frequently Asked Questions

What’s the main difference between short-term and long-term rentals in Denver?

Short-term rentals typically offer higher daily rates ($125 average) but lower occupancy (37-85%), while long-term rentals provide steady monthly income with consistent occupancy rates around 95%. Short-term rentals require more active management and have stricter regulations, including primary residence requirements.

How much can I earn from a short-term rental in Denver?

Short-term rentals in Denver can generate monthly revenue up to $12,249, with average daily rates of $125. However, actual earnings vary significantly based on location, seasonality, and occupancy rates, which typically range from 37-85% throughout the year.

Do I need a license for short-term rentals in Denver?

Yes, Denver requires a valid short-term rental license for all properties. The property must be your primary residence, pass mandatory inspections, and comply with local regulations. Additional requirements include proper insurance coverage and tax compliance.

Which type of rental provides more stable income?

Long-term rentals offer more stable income with 95% occupancy rates and consistent monthly payments. They also have lower operational costs and require less frequent maintenance compared to short-term rentals, making them a more predictable investment option.

How do management responsibilities differ between rental types?

Short-term rentals require daily management including guest communication, cleaning coordination, and frequent maintenance. Long-term rentals involve more periodic tasks like monthly rent collection and occasional property inspections, making them less time-intensive to manage.

Which locations work best for each rental type?

Short-term rentals perform best in tourist hotspots and downtown areas, commanding up to 20% higher rates. Long-term rentals thrive in stable, family-oriented neighborhoods where tenants seek permanent housing solutions.

Long-term rental rates have increased by 14.3% year-over-year, with stable occupancy rates at 95%. The short-term rental market shows seasonal fluctuations, with downtown properties maintaining higher rental rates compared to other areas.

What are the main risks for each rental type?

Short-term rentals face risks like seasonal fluctuations, regulatory changes, and higher operational costs. Long-term rentals may experience extended vacancies, potential tenant defaults, and longer commitment periods, though they generally offer more stability.

 

Conclusion

Both short-term and long-term rentals in Denver present unique opportunities for property investors. We’ve seen how market dynamics regulatory requirements and operational demands shape the success of each strategy. The choice ultimately depends on your investment goals time availability and risk tolerance.

Whether you opt for the higher potential returns of short-term rentals or the stability of long-term tenancies we recommend carefully evaluating your property’s location and your capacity for management. The Denver market continues to evolve making it essential to stay informed about changing regulations and market trends before making your decision.

We’re here to help you navigate these choices and find the rental strategy that best aligns with your investment objectives.

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