Can I operate a short-term rental in Colorado Springs?

Who can get a city permit

Inside Colorado Springs city limits, any property listed on a booking platform as a short-term rental needs a permit from the city, even if it's rented only a few days or weeks a year. The rules depend on whether you live there.

The city's own page describes the single-family rule in two slightly different ways, so I recommend confirming eligibility for the specific address with the city's short-term rental office before you count on a permit.

Two more rules worth knowing:

• Accessory dwelling units. Since June 30, 2025, a property with an ADU isn't eligible for a new short-term rental permit. Properties that already had both legally on that date can continue.
• A military exception. The city can waive the owner-occupancy requirement for up to a year for an active-duty service member stationed in El Paso County who gets temporary duty orders outside the county.

What the permit requires (as of October 2026)

• Fee and renewal: $124.95 a year per listing, renewed without a lapse. There's no grace period, and a non-owner-occupied permit that lapses can be lost.
• It stays with the owner. The permit is issued to you, not the house, and can't be transferred to a buyer.
• Liability insurance: proof of at least $500,000, which can come from the booking platform's coverage.
• Occupancy: two guests per bedroom plus two more, with a maximum of 15.
• A local contact: someone available 24 hours a day who can respond within one hour.
• House rules: post the permit and the city's Good Neighbor Guidelines in the unit, keep weekly trash service, park in the driveway first, and no weddings or large events.
• Taxes paid first: all city taxes owed must be paid before the permit is issued.

Taxes

• City sales tax and lodging tax. Booking platforms such as Airbnb and VRBO collect and remit City of Colorado Springs sales tax. If you take bookings directly, you'll need a city sales tax license. Short-term rentals also owe the city's lodgers tax, like hotels. Confirm what the platform collects and what you file yourself.
• The federal angle. Oftentimes the reason people do short-term rentals is the tax advantages. Under IRS rules, a property with an average guest stay of seven days or less generally isn't treated as a "rental activity" for the passive loss rules, which can let an owner who materially participates use losses against other income. Whether that applies to you, and the records you'd need, is a question for your CPA.

Outside city limits

Unincorporated El Paso County doesn't have a short-term rental ordinance or a permit for renting the main home, but renting an accessory structure needs zoning approval, and the county warns against advertising a property for weddings or other events. Towns such as Manitou Springs, Monument, and Fountain set their own rules, so check with the town for any address outside Colorado Springs.

Check the HOA

Many HOAs limit or ban short-term rentals, and the HOA's rules apply on top of the city's. Read the declarations, rules, and any rental restrictions before you buy. What to review before buying in an HOA explains where to look.

A condo or townhome can be a good fit for a short-term rental because the HOA handles exterior maintenance, which takes a big concern off your plate. You'll pay for that in the monthly HOA fees, so it's a trade-off to be comfortable with, and it only works if the HOA allows short-term rentals at all.

What running one actually takes

We've managed our own short-term rentals, and the biggest lesson is that your cleaner becomes critical. Your cleaner is what makes or breaks the stay.

• Set your cleaner up for success. Take pictures of how everything should look and where everything goes, because you won't be there for every turnover.
• Outfit it well. Furnish it so it looks like new, and invest in good listing photos.
• Give guests what they need. A house book with Wi-Fi, parking, check-out steps, and local tips answers most questions before they're asked.
• Be responsive on Airbnb and VRBO. Quick replies matter to guests and to your reviews.
• Plan for vacancy. Build your numbers on realistic occupancy, including slow seasons.

You can manage it yourself or hire a property manager. Either way, it's not passive income, but it can pay well for the hours you put in.

Insurance

A standard homeowners policy may not cover a home rented to guests. Ask your agent about coverage written for short-term rentals, and read what the booking platform's protection does and doesn't cover. Why homeowners insurance varies between Colorado Springs houses covers the local factors, including hail.

What could change the answer

• Whether you'll live in the home at least 185 days a year.
• The property's zoning and whether another short-term rental is within 500 feet.
• HOA rules, which can be stricter than the city's.
• Whether the property is inside city limits, in unincorporated El Paso County, or in another town.
• Changes to the city's short-term rental code, which has changed several times since 2018.

When to talk with a professional

The City of Colorado Springs short-term rental office can confirm eligibility for an address (shorttermrentals@coloradosprings.gov or 719-385-5982). A CPA can explain the tax rules and the records to keep. An insurance agent can quote short-term rental coverage, and a local short-term rental manager can help you estimate occupancy and run the operations if you'd rather not.