Short-term rentals can be a great way to earn income from your Denver home, but Denver has strict short-term rental rules. Before you list your home on Airbnb or Vrbo, here's what you need to know.
Planning to rent to a tenant for 30 days or more? Click here for my guide to long-term rentals in Denver.
Denver's Primary Residence Rule for Airbnb
In Denver, any rental of less than 30 days at a time is a short-term rental, and you can only offer one if the property is your primary residence. That means it's where you actually live and your usual place of return, and each person can only have one. Buying a separate home just to run as an Airbnb isn't allowed in Denver.
How to Get a Denver Short-Term Rental License
Every short-term rental in Denver needs a license. A few things to know:
- It costs a $50 application fee plus $100 a year, and it renews annually.
- Your license number has to appear on every listing.
- You'll need a lodger's tax account with the city, since short-term rentals are subject to lodging taxes.
- A short-term rental license is separate from the city's long-term Residential Rental Property License, which covers rentals of 30 days or more.
Short-Term Rental rules | Apply for a license | Laws, rules, and regulations
Using an ADU as a Short-Term Rental
An ADU (accessory dwelling unit) is one of the best ways to earn short-term rental income while staying within the rules. ADUs are smaller, self-contained living spaces on the same lot as a home, like a basement apartment, a backyard cottage, or a unit above the garage.
If you live in the main home, you can rent out the ADU short-term, or you can live in the ADU and rent out the main home. You just can't rent both short-term at the same time.
As of December 2024, ADUs are allowed in every Denver zone district that allows new single-family homes. You can have one ADU per primary home, and it must be built by a licensed contractor.
Be aware that there are a lot of nuances to building an ADU. If you're considering one, view the city's website below.
The Happy Medium: Mid-Term Furnished Rentals in Denver
In Denver, mid-term furnished rentals are often the happy medium. You can typically rent a furnished home for more per month than you'd get from a long-term tenant, without the headache of nightly guests. These homes are rented for one to three months at a time, often to traveling nurses, people relocating for work, or anyone between homes, and they're listed on sites like Furnished Finder, Airbnb, and Vrbo.
Because each stay is 30 days or more, mid-term rentals aren't considered short-term rentals, so the primary residence rule doesn't apply. Instead, they fall under Denver's long-term rental rules, which means you'll need a Residential Rental Property License and a passing inspection. Click here for my long-term rental guide.
Estimating Airbnb Income With AirDNA
Before you buy a home with short-term rental plans, it's worth knowing what it could actually earn. Here's a helpful tool I like to share: AirDNA, which tracks performance data from more than 10 million Airbnb and Vrbo listings.
Its Rentalizer tool lets you enter any address and see the projected annual revenue, average nightly rate, and occupancy rate, based on how similar short-term rentals nearby have performed. It also factors in seasonality and demand, and you can enter a purchase price to estimate your first-year return.
A few tips for using it:
- You can run a limited number of searches with a free account. Comparable listings and seasonal forecasts require a paid plan.
- The revenue estimate assumes the home is available all 365 days, so adjust it if you'll be living in or using the space part of the year.
- It doesn't subtract platform fees, taxes, or operating costs like cleaning, supplies, utilities, and furnishings. Treat it as a starting point, not a guarantee.
Let's Talk
Rules like these can feel overwhelming, but they don't have to be. My goal is for every client to walk away with real clarity: what the rules are, what your property needs, and what your options look like. You make the decisions, and I make sure you have what you need to make them well.
Whether you're buying a home in University Hills, Virginia Village, or anywhere in the Denver metro with short-term rental potential, or adding an ADU, reach out at 949-689-3554 or arianna.morris@TheAgencyRE.com.
Frequently Asked Questions
Can I Airbnb my house in Denver?
Only if it's your primary residence. Denver doesn't allow short-term rentals in homes you don't live in.
How much is a Denver short-term rental license?
A $50 application fee plus $100 a year. The license renews annually, and the number must appear on every listing.
Can I rent my ADU on Airbnb in Denver?
Yes, if you live in the main home, or you can live in the ADU and rent out the main home. You can't rent both short-term at the same time.
Do mid-term rentals need a license in Denver?
Yes. Stays of 30 days or more fall under Denver's long-term rental rules, so you'll need a Residential Rental Property License and an inspection instead of a short-term rental license.
This post is for general information only and isn't legal advice. Rules change, so always confirm current requirements with the City of Denver or a real estate attorney.