Rental arbitrage in Denver means leasing an apartment or house on a standard 12-month lease, furnishing it to hotel-quality standards, and listing it on Airbnb, VRBO, or Booking.com as a short-term rental — pocketing the difference between your nightly revenue and monthly rent. Denver is one of the strongest arbitrage markets in the Mountain West: 38.8 million visitors generated $8.2 billion in economic impact across the metro in 2023, average nightly rates for a furnished 2-bedroom sit between $165 and $285 depending on neighborhood and season, and the city’s dual-peak demand calendar (ski season November through April, outdoor summer June through September) eliminates the dead months that kill operators in single-season markets. A well-run 2-bedroom in RiNo or Capitol Hill can gross $4,200 to $5,800/month against a $2,000 to $2,500 lease. That math works.
This guide breaks down everything you need to launch rental arbitrage in Denver: real revenue numbers, the five neighborhoods with the best rent-to-revenue ratios, Denver’s primary residence STR requirement (and what it means for arbitrage operators), how to pitch landlords in a competitive rental market, startup costs specific to the Mile High City, and seasonal demand patterns that drive pricing strategy. Whether you’re eyeing your first unit or expanding into the Denver market from another city, this is the playbook.
What Is Rental Arbitrage in Denver?
Rental arbitrage is the business model where you lease a property from a landlord — typically on a 12-month agreement — furnish it professionally, and operate it as a short-term rental. No mortgage. No down payment. No property taxes. You’re renting and subletting legally, with the landlord’s written permission and the required city license.
Why Denver? Because the demand fundamentals are stacked in your favor.
Start with geography. Denver sits at the gateway to the Rocky Mountains. It’s the closest major city to some of the best ski resorts on the planet — Breckenridge, Vail, Keystone, Copper Mountain, and Arapahoe Basin are all within a 90-minute drive. Millions of travelers fly into Denver International Airport (DEN — the third-busiest airport in the U.S. with 77.8 million passengers in 2023) and need a place to stay before heading up to the mountains, after coming back down, or as a base camp for day trips. That alone creates a massive, recurring pool of STR guests that most cities simply don’t have.
Then stack on Denver’s own draw. Red Rocks Amphitheatre hosts 150+ concerts and events per year, pulling visitors from across the country who need 1-3 nights of accommodation. The Colorado Convention Center hosts 350+ events annually. The Denver Broncos, Colorado Rockies, Colorado Avalanche, and Denver Nuggets generate consistent game-night demand. And the city’s craft brewery scene (70+ breweries in the metro), legalized recreational cannabis tourism, and outdoor lifestyle culture (300 days of sunshine per year) attract a steady stream of leisure travelers year-round.
Second, the rent-to-revenue ratio still pencils in the right neighborhoods. Average monthly rent for a 2-bedroom in an arbitrage-viable area runs $1,850 to $2,600. A well-optimized STR in that same unit can gross $3,800 to $5,800/month depending on location, season, and how dialed your pricing strategy is. That’s enough margin to cover rent, utilities, cleaning, supplies, and still clear $1,200 to $2,400/month profit per unit.
Third, Denver’s landlord culture is more receptive than people expect. The city experienced a significant apartment construction boom from 2018 through 2024 — over 42,000 new units were delivered — and vacancy rates in some submarkets hover around 7-9%. Landlords competing for tenants are more open to creative lease structures, including subletting with written permission. That’s the opening arbitrage operators need.
Denver STR Market Overview (2026)
Here’s what the Denver short-term rental market looks like in 2026, based on AirDNA market data and the Denver Department of Excise and Licenses STR registry:
| Metric | Denver Average (2026) |
|---|---|
| Average Daily Rate (ADR) | $192 |
| Occupancy Rate (Annual Avg) | 64% |
| Revenue Per Available Night (RevPAR) | $123 |
| Active STR Listings | ~5,800 |
| Avg Monthly Revenue (2BR) | $4,450 |
| Peak Night Rate (Ski Season/Red Rocks) | $285–$475+ |
| Lodger’s Tax Rate | 10.75% (combined) |
Several things stand out. The 64% average occupancy is strong for a mid-size market and reflects Denver’s dual-peak demand structure — you don’t get the brutal winter dead zone that hits Sun Belt cities, because ski season IS peak season here. November through March, when STR markets in Phoenix and Austin slow down, Denver operators are booking at 70-78% occupancy as skiers pour through the city.
The ADR of $192 is competitive — lower than Austin ($218) or Nashville ($195), but Denver’s lower average rents offset that gap. When you’re paying $2,100/month instead of $2,500, you don’t need $250/night rates to make money. You need consistent bookings at solid rates, and Denver delivers that.
The event-driven spikes are where Denver really shines. Red Rocks concerts (April through October) drive nightly rates for nearby properties to $250-$400 depending on the headliner. Phish, Dead & Company, and major EDM acts generate the highest premiums. Broncos home games (September through January) push rates $40-$70 above baseline for properties near Empower Field. Ski season weekends — especially holiday weeks like Thanksgiving, Christmas, and Presidents’ Day — can hit $350 to $500/night for well-located 2-bedrooms. The Great American Beer Festival in October, the National Western Stock Show in January, and the Denver Auto Show generate additional spikes.
Here’s the critical insight most people miss: Denver’s airport stopover market is enormous. DEN processes 77.8 million passengers annually. A significant percentage of those travelers — families headed to Vail, corporate groups flying to mountain retreats, international tourists starting Colorado road trips — need one or two nights in Denver before or after their mountain trip. That “gateway” demand creates bookings that aren’t tied to any specific event. It’s structural, year-round demand that supplements everything else.
Arbitrage Viability Score
The fundamental test for any rental arbitrage market is the rent-to-revenue ratio. If your expected monthly STR revenue doesn’t exceed your monthly rent by at least 1.8x, the margins get too thin after expenses. Here’s how Denver stacks up:
| Property Type | Avg Monthly Rent | Avg Monthly STR Revenue | Rent-to-Revenue Ratio | Viability |
|---|---|---|---|---|
| 1-Bedroom | $1,550 | $3,100 | 2.0x | Viable |
| 2-Bedroom | $2,100 | $4,450 | 2.12x | Strong |
| 3-Bedroom | $2,800 | $5,600 | 2.0x | Viable |
| Unique/Luxury | $3,200 | $7,400 | 2.31x | Excellent |
Denver’s 2-bedroom sweet spot — the most common arbitrage unit type — hits a 2.12x ratio. That’s healthier than several comparable markets. For context, anything above 2.0x gives you enough margin to cover cleaning ($120-$160/turnover), utilities ($150-$250/month), supplies ($75-$120/month), software and tools ($80-$150/month), and still clear meaningful profit.
The “Unique/Luxury” category deserves attention. Denver has a growing market for distinctive properties — converted lofts in RiNo, mountain-view penthouses in Highland, historic Victorians in Baker. These command significant ADR premiums ($225-$375/night) because they photograph well, generate strong reviews, and attract higher-spending guests. If you can negotiate a lease on one of these units, the margins widen considerably.
One caveat: these revenue numbers assume competent operations. That means professional photos, dynamic pricing with tools like PriceLabs or Beyond, a reliable cleaning team, fast response times, and a listing that’s optimized for search ranking on Airbnb and VRBO. Operators who phone it in — phone photos, static pricing, slow responses — will see revenues 25-40% below these benchmarks.
Top 5 Denver Neighborhoods for Rental Arbitrage
Not every Denver neighborhood works for arbitrage. You need the intersection of reasonable rents, strong STR demand, walkability or proximity to attractions, and landlords willing to permit subletting. These five consistently deliver the best results:
1. RiNo (River North Art District)
RiNo is Denver’s creative core — a former industrial warehouse district that’s been transformed into the city’s hottest neighborhood for breweries, galleries, restaurants, and street art. It borders the Platte River, sits between I-25 and I-70, and is a 10-minute walk from Coors Field and Union Station.
- Average 2BR Rent: $2,200–$2,600/month
- Average STR Nightly Rate: $195–$285
- Occupancy Rate: 68%
- Monthly Revenue Potential: $4,500–$5,800
- Guest Appeal: Walkable to breweries (Ratio Beerworks, Epic Brewing), galleries, Larimer Street restaurants. Young professionals and couples love it. Strong photography backdrop for listings
- Arbitrage Verdict: Highest upside in Denver, but rents are climbing. Target older buildings where landlords are feeling vacancy pressure
2. Capitol Hill
Capitol Hill (“Cap Hill”) is Denver’s most diverse and walkable neighborhood. Dense mix of Victorian homes, mid-rise apartments, bars, restaurants, live music venues, and LGBTQ+ nightlife. Centrally located with easy access to downtown, Colfax Avenue, and Cheesman Park.
- Average 2BR Rent: $1,800–$2,200/month
- Average STR Nightly Rate: $165–$235
- Occupancy Rate: 66%
- Monthly Revenue Potential: $3,800–$4,600
- Guest Appeal: Walkable nightlife, restaurants, Molly Brown House Museum, proximity to downtown. Budget-conscious travelers and young groups book here. Strong mid-week demand from business travelers
- Arbitrage Verdict: Best value play in Denver. Lower rents + solid occupancy = reliable margins. Great for first-time operators
3. Highland (LoHi & Upper Highland)
Highland — particularly the Lower Highland (LoHi) subneighborhood — is Denver’s upscale dining and views district. Perched on a bluff overlooking downtown with stunning skyline and mountain views. LoHi’s restaurant row along 32nd Avenue is one of the best dining strips in Colorado.
- Average 2BR Rent: $2,100–$2,500/month
- Average STR Nightly Rate: $185–$275
- Occupancy Rate: 65%
- Monthly Revenue Potential: $4,200–$5,200
- Guest Appeal: Mountain and skyline views (massive listing differentiator), top-tier restaurants (Linger, Root Down, Highland Tap & Burger), walkable to downtown via the Highland Bridge. Attracts couples, foodies, and luxury travelers
- Arbitrage Verdict: Premium positioning. Units with views command 25-35% ADR premiums. Worth paying slightly higher rent for the right unit
4. Baker
Baker is south Denver’s creative neighborhood — think Capitol Hill energy with a grittier, more authentic vibe. South Broadway (“SoBro”) runs through the center with vintage shops, dive bars, tattoo parlors, and independently owned restaurants. Close to I-25 and an easy shot to Red Rocks via Highway 6.
- Average 2BR Rent: $1,750–$2,100/month
- Average STR Nightly Rate: $155–$225
- Occupancy Rate: 62%
- Monthly Revenue Potential: $3,600–$4,300
- Guest Appeal: Authentic Denver feel, budget-friendly for guests, close to Red Rocks (20-minute drive), South Broadway bar crawl. Solo travelers, groups of friends, and Red Rocks concertgoers
- Arbitrage Verdict: Lowest entry point of the five. Best margins on a percentage basis because rents are 15-20% below RiNo/Highland while demand stays solid. Red Rocks proximity is a genuine demand driver April through October
5. Five Points
Five Points is Denver’s historic jazz district, now one of the city’s fastest-gentrifying neighborhoods. Beautiful Victorian and Craftsman homes sit alongside new construction. Welton Street is lined with restaurants, music venues, and cultural landmarks. Walking distance to RiNo and downtown.
- Average 2BR Rent: $1,900–$2,300/month
- Average STR Nightly Rate: $170–$245
- Occupancy Rate: 63%
- Monthly Revenue Potential: $3,900–$4,700
- Guest Appeal: Historic character, walkable to RiNo and downtown, emerging restaurant scene, culturally rich. Attracts travelers who want an authentic, non-touristy experience
- Arbitrage Verdict: Best upside trajectory. Rents are still reasonable relative to the rapid appreciation in the area. Early movers here will benefit as the neighborhood continues to develop. Look for Victorian homes with character — they photograph beautifully and command ADR premiums
Denver STR Regulations & Permits
Denver’s short-term rental regulations are stricter than many markets, and understanding them is non-negotiable before you sign a lease. Here’s the current framework as of 2026:
Primary Residence Requirement
This is the big one. Denver requires that any property operated as a short-term rental (fewer than 30 consecutive days) be the host’s primary residence. That means the address on your STR license must match your driver’s license, voter registration, or vehicle registration. You must live at the property for at least 185 days per year.
What does this mean for arbitrage operators? It limits you to one licensed STR unit — the one you live in. You cannot lease five apartments across Denver and list them all as STRs. However, there are strategies operators use within the law:
- Live-in arbitrage: Live in a 3-bedroom, rent two rooms on Airbnb while you occupy the third. Revenue potential: $2,400-$3,600/month from the rented rooms alone
- Single-unit optimization: Operate one STR at maximum efficiency while building income toward property acquisition
- Accessory Dwelling Units (ADUs): If your primary residence has a detached ADU (garage apartment, carriage house), you may be able to license both the main unit and the ADU. Check current zoning rules with Denver Community Planning and Development
- Mid-term rental strategy: Mid-term rentals (30+ day stays) do NOT require an STR license in Denver. You can lease multiple units and operate them as furnished monthly rentals without the primary residence restriction. This is a legitimate path to scaling
Licensing Process
To legally operate an STR in Denver, you need:
- Short-Term Rental License — Apply through the Denver Department of Excise and Licenses. Cost: $50 application fee + $100 annual license fee. Requires proof of primary residence, landlord’s written consent (if renting), and a passed safety inspection
- Sales Tax License — Required for collecting and remitting Colorado sales tax. Apply through the Colorado Department of Revenue
- Lodger’s Tax Registration — Denver imposes a lodger’s tax on stays under 30 days. Combined tax rate is approximately 10.75% (city + state + tourism improvement district, depending on location). Airbnb and VRBO collect and remit most of this automatically, but verify your specific obligations
- Safety Inspection — Denver requires a self-certification or in-person inspection covering smoke detectors, carbon monoxide detectors, fire extinguishers, and egress requirements
Recent Regulatory Changes
Denver has tightened STR enforcement over the past few years. The city added a dedicated STR enforcement team, increased fines for unlicensed operators (up to $999/day), and implemented a platform accountability ordinance requiring Airbnb and VRBO to verify license numbers before allowing listings to go live. Operators without valid licenses get delisted.
The good news: if you follow the rules — get licensed, pay your taxes, maintain safety standards — you’re operating in a regulated market with higher barriers to entry. That means fewer competitors than markets with loose or no regulation. Regulation is a moat, not a wall, for operators who do things right.
Always verify current regulations directly with Denver Excise and Licenses before committing to a lease. Rules evolve, and the information here reflects the framework as of early 2026. For a broader look at how regulations vary across states, check our Airbnb regulations by state guide.
Landlord Culture & Negotiation Tips
Denver’s rental market has shifted in favor of tenants since the construction boom peaked. Between 2020 and 2024, developers delivered over 42,000 new apartment units across the metro, and some submarkets — particularly in RiNo, LoHi, and the Central Platte Valley — have vacancy rates of 7-9%. That’s leverage for arbitrage operators.
Here’s the reality: a landlord with a vacant unit losing $2,200/month in rent is motivated. If you can pitch yourself as a reliable, long-term tenant who will maintain the property at a higher standard than a typical renter, you’ve got a compelling offer. The key is positioning your STR operation as a benefit, not a risk.
The Pitch Script That Works in Denver
When approaching landlords, lead with value. Here’s a framework I’ve seen work consistently:
“I run a professional hospitality business. I lease apartments, furnish them to boutique hotel standards, and manage them as licensed short-term rentals. Here’s what that means for you as a landlord:
- I’ll sign a 12-month lease and pay on time every month — guaranteed
- The unit will be furnished with $8,000-$12,000 in quality furniture and maintained weekly by a professional cleaning team
- I carry $1 million in commercial liability insurance (Airbnb provides this as Host Protection Insurance, but I also carry my own policy)
- I have a Denver STR license and operate fully within city regulations
- I’ll provide you with a monthly operations report showing guest reviews and property condition
- You’re welcome to inspect the property anytime with 24 hours’ notice
I’m essentially going to take better care of this unit than any typical tenant would, because my business depends on 5-star reviews.”
Denver-Specific Negotiation Tips
- Target newer buildings with high vacancy: Complexes built between 2020 and 2023 often have concession-heavy lease terms (free month, reduced deposit). These property managers are under pressure to fill units and are more open to creative arrangements
- Offer a higher security deposit: Offering 2-3 months’ rent as a deposit immediately signals seriousness and reduces the landlord’s perceived risk
- Highlight the primary residence angle: Denver’s STR law requires you to live there. That actually reassures landlords — you’re not some absentee operator running a party house. You’re living on-site and personally invested in the property’s condition
- Bring your license: Having your STR license application in process (or already approved) when you approach landlords demonstrates professionalism and legal compliance. Most landlords’ objections evaporate when they see you’re doing this by the book
- Start with independent landlords: Individual property owners with 1-5 units are far more flexible than large management companies. Drive neighborhoods, look for “For Rent” signs, and reach out directly. Facebook Marketplace and Craigslist are goldmines for independent landlord leads in Denver
For a deeper dive on how to start an Airbnb business including landlord negotiation frameworks, check that guide.
Startup Costs for Denver Rental Arbitrage
Here’s what it actually costs to launch a rental arbitrage unit in Denver. These numbers are based on a standard 2-bedroom apartment in the $2,000-$2,400/month rent range:
| Expense Category | Estimated Cost | Notes |
|---|---|---|
| First Month’s Rent | $2,200 | Due at lease signing |
| Security Deposit | $2,200–$4,400 | 1-2 months; offer higher for negotiation leverage |
| Furniture Package | $5,500–$9,000 | Beds, sofa, dining table, desks, nightstands, dressers |
| Linens & Towels | $600–$900 | 3 sets per bed, white hotel-quality |
| Kitchen Setup | $400–$700 | Cookware, dishes, utensils, coffee maker, toaster |
| Decor & Staging | $500–$1,200 | Mountain/Colorado themed art, plants, accent pieces |
| Smart Lock & Tech | $250–$400 | Keyless entry, noise monitor, WiFi router |
| Professional Photos | $200–$350 | Worth every penny. This is your storefront |
| STR License & Fees | $150 | $50 application + $100 annual license |
| Insurance | $100–$175/month | Commercial liability beyond Airbnb’s coverage |
| Initial Supplies | $300–$500 | Toiletries, cleaning supplies, welcome kit |
| Total Startup | $12,400–$19,825 | Range depends on deposit and furniture quality |
A realistic budget for a Denver launch is $14,000 to $16,000. You can trim this to $11,000-$12,000 by sourcing furniture from Facebook Marketplace, IKEA, and estate sales — Denver has a robust secondhand furniture market, especially in neighborhoods like Baker and Five Points where turnover is constant.
One Denver-specific note: invest in quality blackout curtains. At 5,280 feet elevation, Denver sunshine is intense — especially in south- and west-facing units. Guests will mention it in reviews if the bedroom is bright at 5:30 AM in June. A $60 set of blackout curtains saves you from 4-star reviews complaining about sleep quality.
For a complete breakdown of costs across different markets, see our Airbnb startup costs guide.
Seasonal Demand Patterns in Denver
Denver’s dual-peak demand calendar is one of its biggest advantages for arbitrage operators. Unlike Sun Belt markets that crater from November through February, or beach markets that die after Labor Day, Denver has two strong seasons separated by short shoulder periods. Here’s how demand flows throughout the year:
Ski Season (November – April)
This is Denver’s primary peak. Skiers and snowboarders from across the country fly into DEN and either stay in the city before heading to the mountains or use Denver as a base for day trips to resorts 60-90 minutes away (Loveland, Eldora, and A-Basin are the closest). Occupancy climbs to 70-78% from mid-November through March. Holiday weeks — Thanksgiving, Christmas, New Year’s, MLK weekend, Presidents’ Day — are the highest-demand periods of the entire year. Nightly rates for well-positioned 2-bedrooms regularly hit $275-$450 during holiday ski weeks.
The National Western Stock Show in January adds another demand layer — it draws 700,000+ visitors over 16 days to the National Western Complex in Globeville, just north of RiNo. Properties in RiNo and Five Points see noticeable booking bumps during Stock Show.
Summer Outdoor Season (June – September)
Denver’s second peak. The city becomes an outdoor recreation hub: hiking in the Front Range, mountain biking, whitewater rafting, camping in Rocky Mountain National Park, and exploring the city’s 850+ miles of bike lanes and trails. Red Rocks concert season runs roughly April through October, with the heaviest schedule June through August. A single major concert (think Phish, Dave Matthews Band, Tyler Childers) can spike nightly rates 30-50% for properties within 25 minutes of the venue.
Summer occupancy averages 68-75%, with weekend rates $20-$50 above weekday rates. The Denver Pop Culture Con, Denver Arts Festival, and Taste of Colorado add event-driven demand spikes in this period.
Shoulder Seasons (May & October)
These are Denver’s softest months, but “soft” is relative. May sees the tail end of ski season at high-elevation resorts (A-Basin often stays open into June) overlapping with the start of Red Rocks concerts and warming weather. October brings fall foliage demand, the Great American Beer Festival (60,000+ attendees), and the last Red Rocks shows of the year. Occupancy dips to 55-62%, but smart operators use dynamic pricing to maintain revenue by lowering minimums and targeting mid-week business travelers.
Denver’s Event Calendar Cheat Sheet
| Month | Key Events/Demand Drivers | Rate Impact |
|---|---|---|
| January | National Western Stock Show, MLK ski weekend | +25-40% |
| February | Presidents’ Day ski week | +30-50% |
| March | Spring break ski weeks, St. Patrick’s Day parade | +20-35% |
| April | Rockies opening day, Red Rocks season starts, 420 Festival | +15-25% |
| May | Late-season skiing, Memorial Day weekend | +10-20% |
| June | Red Rocks peak, Denver PrideFest, outdoor season launch | +20-30% |
| July | 4th of July, Red Rocks peak, Cherry Creek Arts Festival | +25-40% |
| August | Red Rocks peak, Colorado Dragon Boat Festival | +20-30% |
| September | Broncos season starts, Labor Day, A Taste of Colorado | +15-30% |
| October | Great American Beer Festival, fall foliage, Nuggets/Avs season starts | +15-25% |
| November | Thanksgiving ski week, Broncos, Christkindlmarket | +30-50% |
| December | Christmas/New Year’s ski season, Denver Parade of Lights | +40-60% |
The bottom line: Denver doesn’t have a true “dead” month. Even the softest weeks (mid-May, mid-October) still generate enough demand to cover rent and basic expenses. That’s rare. Most arbitrage markets have 2-3 months where operators bleed money. Denver’s dual-peak structure virtually eliminates that risk.
How 10XBNB Students Succeed in Denver
Denver’s combination of strong demand fundamentals, dual-peak seasonality, and a regulated (but navigable) STR framework makes it an ideal market for operators who are willing to do the work properly. But “willing to do the work” is the key phrase. The operators who succeed in Denver aren’t winging it — they’re following a proven system.
The 10XBNB program teaches the exact frameworks that work in markets like Denver: how to identify the right neighborhoods using data (not gut feel), how to negotiate with landlords and get written subletting permission, how to furnish units for maximum ADR without overspending, how to build pricing strategies that capture event-driven spikes, and how to scale from one unit to multiple properties.
Denver-specific advantages that 10XBNB students leverage:
- The mid-term pivot: Because Denver’s primary residence requirement limits traditional STRs to one unit, smart operators use the 10XBNB framework to run their primary residence as a high-yield STR while scaling through mid-term rentals (30+ days) on additional units. No license required for 30+ day stays
- Ski season pricing optimization: 10XBNB’s pricing module teaches operators to set dynamic minimums and surge pricing for the specific holiday ski weeks that generate 40-60% of annual revenue in a 6-week window
- Airport stopover targeting: Building listings specifically optimized for the DEN airport gateway market — emphasizing easy highway access, ski storage, early check-in/late checkout — captures the enormous throughput of travelers passing through Denver on their way to the mountains
If you’re considering Denver as your market — or any top Airbnb market in 2026 — having a structured system beats figuring it out through expensive trial and error. The margins in Denver are strong enough to support a profitable operation, but only if you execute on the fundamentals: right unit, right neighborhood, right pricing, right guest experience.
Frequently Asked Questions
Can you do rental arbitrage in Denver legally?
Yes, but with a significant restriction. Denver requires STR operators to hold a Short-Term Rental License, and the property must be your primary residence (you must live there at least 185 days per year). This limits you to one STR unit. However, you can operate additional units as mid-term rentals (30+ day stays) without an STR license or primary residence requirement.
How much can you make with rental arbitrage in Denver?
A well-optimized 2-bedroom in an arbitrage-viable neighborhood (RiNo, Capitol Hill, Highland, Baker, Five Points) can gross $4,200-$5,800/month. After rent ($2,000-$2,500), cleaning ($500-$700), utilities ($150-$250), supplies ($75-$120), and software ($80-$150), net profit typically ranges from $1,000 to $2,400/month per unit. Operators who capture ski season and Red Rocks demand spikes with dynamic pricing consistently land at the higher end.
What are the best neighborhoods for Airbnb arbitrage in Denver?
The five strongest neighborhoods are RiNo (highest revenue potential), Capitol Hill (best value and lowest entry cost), Highland/LoHi (premium positioning with mountain views), Baker (best margins on a percentage basis), and Five Points (strongest upside trajectory). Each has a different risk/reward profile — see the neighborhood breakdown above for detailed numbers.
How much does it cost to start rental arbitrage in Denver?
Total startup costs for a 2-bedroom unit range from $12,400 to $19,825, with a realistic budget of $14,000-$16,000. This covers first month’s rent, security deposit, furniture, linens, kitchen setup, decor, smart lock, professional photos, licensing, and initial supplies. You can reduce this to $11,000-$12,000 by sourcing furniture secondhand. See our complete Airbnb startup costs breakdown for market-by-market comparisons.
Does Denver’s primary residence requirement kill the arbitrage model?
It limits it — you can only operate one STR. But it doesn’t kill it. A single well-optimized unit in Denver can generate $12,000-$28,000/year in profit. And the primary residence restriction actually reduces your competition by keeping casual and out-of-state operators out of the market. The real scaling play in Denver is combining one STR (your primary residence) with multiple mid-term rentals (30+ day furnished leases) that don’t require an STR license.
Is Denver better than other Colorado cities for rental arbitrage?
For the arbitrage model specifically, Denver offers the best combination of demand diversity (ski, concerts, sports, conventions, airport gateway), year-round occupancy, and available rental inventory. Colorado Springs has lower rents but significantly lower ADRs. Boulder has strong demand but extremely high rents that compress margins. Mountain towns (Breckenridge, Vail) have incredible nightly rates but rents are astronomical and most require property ownership. Denver hits the sweet spot. For a broader market comparison, check our Colorado Airbnb market guide.
What tax obligations do Denver STR operators have?
Denver STR operators must collect and remit lodger’s tax (combined rate approximately 10.75%), Colorado state sales tax, and report rental income on federal and state tax returns. Airbnb and VRBO automatically collect and remit most occupancy taxes in Denver, but you should verify your specific obligations with a tax professional. You’ll also need a Colorado Sales Tax License. Keep detailed records of all revenue, expenses, and tax payments — rental arbitrage is a business, and the IRS treats it as one.
