Short-term rentals in Denver are becoming more prevalent with an increase of 95 percent in two years. Not only are they a great option for travelers, they are an effective way to make supplemental income from your property when you are away.
Short-term rentals are classified as residential properties that are rented for a period of time ranging from one to 29 days. Sites like Airbnb and Vacation Rental By Owner (VRBO) have provided an easy way to list your property to potential renters. But before you begin renting your property, here is a list of guidelines to follow for short-term rentals.
Acquire a Short-Term Rental License.
In order to rent out your property in Denver for one to 29 days, you must have a short-term rental license. Review the requirements and apply for a short-term rental license here. The application fee is $25 and the license must be renewed every year.
Obtain Liability Insurance.
Before you begin renting out your property, you are required to obtain at least $1 million worth of liability insurance. If you are processing transactions through a platform like Airbnb or VRBO, this minimum coverage is included. Make sure you also inform your insurance company that this property is a short-term rental. Failure to do so could result in a suspension of your short-term rental license.
Verify the Property is Your Primary Residence.
In Denver, the short-term rental must be the primary residence of the property owner. You will be required to provide proof that the property is your primary residence upon applying for a short-term rental license. Acceptable forms include a Colorado driver’s license or state ID, voter’s registration, tax documents, motor vehicle registration or utility bills with your name and the address of the property. Denver pays attention to rental complaints and is cracking down on violations with arrests and felony charges.
Keep Your Property Safe.
Now that you’ve properly set up your home to be rented, make sure it remains safe while you are away. Installing a keypad on exterior doors allows renters easy access to your home and often lock automatically when they are closed. Some even link to your smartphone and allow you to reset them while you are away. This can be helpful if a renter has trouble with the code.
Provide your guests with access to emergency materials like a fire extinguisher, first aid kit, and a list of nearby hospitals with phone numbers. Also, check to make sure your smoke detectors and carbon monoxide sensors are functioning properly.
Pay Taxes on Rental Income.
Once you start receiving income on your short-term rental property, you will be required to pay Lodger’s Tax (10.75 percent), Occupational Privilege Tax ($48/year), and any other applicable taxes or fees. More information can be found on the City and County of Denver website.
If you travel for work frequently or vacation often enough that your home is empty for weeks at a time, obtaining a short-term rental license may be a fit for you. Just remember to follow these guidelines to ensure that your rental is prepared for guests.