(Be sure to scour through part one of buying and operating an AirBNB in Denver before reading part 2)
You’ve done your preliminary homework regarding buying and operating an AirBNB in Denver. You’ve set up your lodger tax ID number and applied for your short term rental license with the city of Denver…
Than your memory kicks in, and it hits you like a sack of bricks.
“The City of Denver only allows short-term rentals on your primary residence,” you recall.
For many entrepreneurs, this is a deal breaker — and with good reason. The savvy Denver investor, however, will not let this stop his or her goal of cashing in on the AirBNB bandwagon, initiating the process of buying and operating an AirBNB in Denver.
“You have my attention. How do I skirt the system?” you ask yourself.
As a preface, let us be clear that the following is in no way breaking the law or skirting the system. The short-term rental licensing rules in Denver have been set up to protect heavy competition for area hotels while still leaving some wiggle room for homeowners to receive extra income from excess space.
Extra Bedrooms In Your Home:
Let’s start simple. If you have an extra bedroom or unused basement in your house, as well as enough faith in mankind to allow strangers into your home, then this option is for you. Tastefully furnish your unused room and turn your residence into a mini bed and breakfast. (Hence the BNB in AirBNB). Don’t feel obligated to serve breakfast, however expect guests to look to you as a local expert.
Purchase a second-home:
Owning a second home is no longer a right of passage only for the rich and famous. Getting approved for a loan on a second home will allow you the opportunity to explore the real estate market for a property that both you and AirBNB guests would find comfort in.
Building a carriage home or mother-in-law suite:
In many neighborhoods, zoning allows homeowners to build carriage homes in their backyard. This may mean constructing an entirely new structure or an apartment over a preexisting garage, as is common practice in Denver.
Rent to rent:
This one is a bit complex and requires you to buy a primary residence with the intention of renting it after you’ve lived there for a year. Find a tenant who is willing to operate the AirBNB in your property and charge them a heavily inflated rent to do so. In the rental agreement, be sure to encourage subleases and educate the tenant on how to operate a short term rental. It’s a win-win proposition — you, the homeowner, receive a way above average rental-rate, while the tenant ultimately becomes a small-business owner and collects profits from the AirBNB he or she is now running.
Rent to friend:
Renters looking to make an extra buck may choose to rent out their entire home on occasion. AirBNB allows the same property to be listed more than once. For example, if you live in a two bedroom apartment, you may have one listing for a single private bedroom and a second for the entire place. Economical tenants will put a plan in place before they accept a request for the whole home, often times taking up residence at a friend’s home. This technique is only permitted should your rental agreement allow for subleases. Best practice would be to speak with your landlord and confirm directly whether or not subleases are allowed.
It’s easy to understand why these aren’t loopholes, but rather strategies that the city of Denver allows for. Visit DenverGov for a full list of rules and regulations pertaining to buying and operating an AirBNB in Denver.
There is of course one more option tactic that is not mentioned above…a bonus option:
Take a leap and see the world: Take a sabbatical from work, pack and bag and go on the trip you’ve been dreaming about for years. As long as you have Internet connection, you’ll be able to manage your AirBNB listing from anywhere in the world.