What should I know before buying a Colorado Springs property for Airbnb or VRBO?

1. Confirm the permit before you're committed

This is the first check, because it can make or break the plan.

• An existing listing doesn't mean you can get a permit. City permits are issued to the owner, not the house, and can't be transferred. The seller's permit ends with the sale, and you'd apply under the rules that apply to you.
• Your situation sets the rules. If you won't live there at least 185 days a year, a short-term rental is generally not allowed in single-family zones, must be 500 feet from another short-term rental in other zones, and is limited in how many units you can list. Properties with an accessory dwelling unit aren't eligible for new permits.
• Check the specific address with the city's short-term rental office before your inspection or due diligence deadline, so you can still walk away if the answer is no. What contingencies to consider explains those deadlines.

Can I operate a short-term rental in Colorado Springs? covers the full permit rules, taxes, and insurance. Outside city limits, El Paso County and towns like Manitou Springs and Monument have their own rules.

2. Check the HOA and the full monthly cost

Many HOAs limit or ban short-term rentals, and an HOA can change its rules later. Read the declarations and rules before you're under contract, and ask whether any rental amendment is being considered. A condo or townhome can lower your exterior maintenance, but you'll pay for it in HOA dues. What to review before buying in an HOA and what a metro district can add to your monthly cost help you add up the full monthly number.

3. Buy the experience, not just the house

When I walk a property with someone buying a short-term rental, I'm looking for a premium experience. Guests aren't looking for a run-of-the-mill property. They want to arrive and say, "Wow, this is why I came to Colorado Springs."

That could be:

• a view, such as Pikes Peak or the mountains;
• being close to a premium experience, such as trailheads, Garden of the Gods, or other attractions visitors come for;
• or a walkable downtown location.

The layout matters too: enough bedrooms and bathrooms for the groups you're targeting, outdoor space, and driveway parking, since the city expects guests to park in the driveway first.

4. Run both scenarios and know your exit

I recommend running the numbers both ways, as a short-term rental and as a long-term rental. Options, really exit strategies, are the key to it all. Have defined and known exit strategies in mind: a short-term rental, a long-term rental, or fixing it up and selling, depending on what you want to do and what your goals are.

For the short-term side, build in:

• realistic nightly rates and occupancy, including slow seasons, estimated from comparable local listings and a conversation with a local short-term rental manager;
• cleaning for every turnover, supplies, and platform fees;
• furniture, linens, and listing photos before your first guest;
• utilities, internet, and streaming you'll pay year-round;
• lodging and sales taxes, insurance, the permit fee, and management if you won't run it yourself;
• and a reserve for repairs.

Then run the long-term version. What to calculate before turning a home into a rental has the worksheet. If the property only works as a short-term rental at optimistic occupancy, that's a sign to keep looking.

5. Financing, insurance, and taxes

• Financing. Loan rules differ for a primary home, a second home, and an investment property, including how rental income counts. Tell your lender how you plan to use the property before you apply.
• Insurance. You'll need coverage written for short-term rentals, and the city requires proof of at least $500,000 in liability coverage.
• Taxes. Ask your CPA about the short-term rental tax rules, depreciation, and how you'd handle a sale later, including whether a 1031 exchange could apply.

What could change the answer

• Whether you'll live in the property part of the year.
• The property's zoning and nearby short-term rentals.
• HOA rules, and whether they're likely to change.
• The type of loan you use.
• Changes to the city's short-term rental rules.

When to talk with a professional

The City of Colorado Springs short-term rental office can confirm whether an address is eligible. A lender can explain which loan fits how you'll use the property, a CPA can walk you through the tax side, and an insurance agent can quote short-term rental coverage. A local short-term rental manager can help you estimate occupancy, and a real estate professional can help you test both scenarios before you write an offer.