1st Advantage MortgageDenver only licenses short-term rentals at the host's primary residence, so a nightly investment property is not an option and long-term rent carries the ratio.
Population: 729,019 (U.S. Census Bureau city and town estimate, July 1, 2024).
The Denver rental picture
Denver draws renters through technology, healthcare, aerospace, the federal government and an active outdoor economy. Prices are high, so DSCR ratios are tight and investors often buy duplexes, townhomes or small multifamily to add units under one loan. Condominium and association dues should be read carefully.
Where Denver investors look
- Highlands and Sunnyside. older bungalows and new townhomes northwest of downtown
- Capitol Hill and Cheesman Park. apartment-dense neighborhoods near the state capitol
- Baker and Washington Park. higher-priced homes and duplexes south of downtown
- Five Points and RiNo. redeveloping neighborhoods east and north of downtown
- Park Hill. established east side homes
Local rules to check before you underwrite
Denver issues short-term rental licenses for rentals of 1 to 29 days, and the unit must be the host's primary residence, with only one primary residence allowed per person. That rule means a second-home or purely investment nightly plan does not qualify, so underwrite a Denver rental on its long-term lease or an appraiser's market rent and treat the license as a way to rent your own home when you travel.
Local rules checked October 2026 against: Denver short-term rentals, Denver code Chapter 33. Rules change, so confirm with the city before you rely on them.
What to price into the payment
Colorado metro districts and special districts can add property tax in newer areas, and Denver's high prices make insurance and taxes weigh on the ratio, so get actual quotes. Hail is a regular insurance factor along the Front Range.
What the numbers say about Denver
Start with the two numbers every DSCR file turns on. Rent in Denver runs a median $1,831 a month (close to the Colorado median of $1,761), and the median owner-occupied home is worth $616,000. By the simple measure of annual rent over home value, Denver sits at 3.6%, a lean ratio that leaves little room for taxes, insurance and dues. Lenders do not underwrite a ratio like that, but investors use it to decide where to look first.
| Indicator | Colorado | Denver | Difference |
|---|---|---|---|
| Tax as a share of home value | 0.48% | 0.45% | -7% |
| Annual property tax bill, median | $2,602 | $2,751 | +6% |
| Household income, median | $95,470 | $94,718 | -1% |
| Typical monthly rent | $1,761 | $1,831 | +4% |
| Persons per household | 2.42 | 2.10 | |
| Share in 2-4 unit buildings | 4.7% | 5.1% | +8% |
| Share of homes detached | 61.4% | 40.5% | -34% |
| Long commuters, 45 min plus | 14.1% | 11.0% | -22% |
| Degree holders, age 25+ | 45.7% | 56.5% | +24% |
| Workers on their own account | 11.3% | 9.7% | -15% |
| Renters paying 30%+ of income | 52.9% | 47.6% | -10% |
| Units sitting vacant | 8.3% | 6.7% | -19% |
| Typical construction year | 1988 | 1975 | |
| Households that rent | 33.8% | 51.2% | +52% |
| Residents (Census estimate) | 5,862,189 | 718,877 |
Renters occupy 51.2% of Denver's occupied homes, well above the Colorado median of 34%, so tenant demand is deep and investors compete mainly on condition and location. Against a median household income of $94,718 (close to the Colorado median of $95,470), 48% of renters report rent at or above 30 percent of income.
What Denver investors are buying
Buildings with two or more units make up about 50% of Denver's housing, including 5% in two to four unit buildings and 13% in buildings of five to 19 units. Median year built is 1975, so many homes are reaching the age when major systems need replacing.
Denver reports 7% of units vacant and a rental vacancy rate of 5.5%, a measure of how quickly a listed unit might lease.
Investor takeaways for Denver
At 3.6% gross, Denver is a tight market for DSCR math, and investors often turn to interest-only structures, higher rents on renovated units or small multifamily to make the ratio clear. Homes of this vintage age unevenly, so rent comparables should come from properties in similar condition. A large renter population (51%) supports leasing, though it also means many competing landlords, so condition and price positioning count.
What costs can do to a Denver ratio
Real estate taxes are a line the rent has to cover. The median owner in Denver pays $2,751 a year (close to the Colorado median of $2,602), which is about 0.45% of the median home value. In rent terms, the tax bill equals roughly 13% of twelve months of median rent.
For hazards, FEMA's National Risk Index puts Denver County at a relatively high overall rating, and its top-ranked hazards are hail (very high), lightning (very high) and tornadoes (relatively high).
| Hazard in Denver County, FEMA index | Level |
|---|---|
| Strong wind exposure | Relatively High |
| Tornadoes exposure | Relatively High |
| Lightning exposure | Very High |
| Hail exposure | Very High |
| Social vulnerability score | Very Low |
| Annualized loss estimate | Relatively High |
| Composite risk | Relatively High |
Flood risk in Denver is parcel by parcel: check the address on FEMA's flood map service, because a mapped high-risk zone means required flood cover and a heavier payment.
Working the Denver rent math
Try the math at the medians. With rent at $1,831 and taxes near $229 a month, a 1.00 DSCR leaves $1,602 for everything else in the payment, a 1.20 ratio leaves $1,297, and a 1.25 ratio leaves $1,236. Any real property will differ, but the exercise shows how little room insurance and dues can take.
Landlord and short-term rental rules in Denver
If you are weighing nightly income in Denver, the state tax backdrop is this. Colorado requires a sales tax license for an owner who rents rooms or accommodations, with tax generally due on stays under 30 consecutive days, and a marketplace that collects for the owner typically covers state, local and lodging taxes, while county or city lodging filings can be separate.
Deposit limits are set by statute in Colorado (C.R.S. §§ 38-12-102.5, 38-12-103 (as amended by HB25-1249, eff. Jan 1, 2026)), and for Denver landlords the rule reads: 2 months' rent (since Aug 7, 2023). After move-out, the Denver owner has 30 days to return the deposit or account for deductions. As to caps on rent in Denver: No; counties and municipalities are prohibited from enacting rent control (C.R.S. 38-12-301).
Comparing Denver with surrounding markets
Looking across the table, values run from $469,100 (Aurora) up to $658,100 (Centennial), and Denver lands at $616,000.
| Market | Renter share | Tax bill | Home value | Residents | Rent |
|---|---|---|---|---|---|
| Westminster | 38% | $2,614 | $532,400 | 115,484 | $1,882 |
| Centennial | 19% | $3,588 | $658,100 | 108,201 | $2,148 |
| Thornton | 29% | $2,911 | $517,500 | 144,187 | $1,895 |
| Aurora | 38% | $2,457 | $469,100 | 394,432 | $1,835 |
| Denver | 51% | $2,751 | $616,000 | 718,877 | $1,831 |
Employers and institutions near Denver rentals
Self-employed workers, incorporated or not, make up 9.7% of employed residents, a group that often has irregular tax-return income and a natural fit with rent-based qualification. Other workforce markers: government workers are about 12% of employment, 57% of adults hold a bachelor's degree or higher and 11% of commuters travel 45 minutes or more.
Wikipedia's employer table for Denver for 2023 names City and County of Denver, Denver Public Schools, State of Colorado, Denver Health & Hospital Authority and United Airlines among the largest employers, a useful starting point for judging how steady renter demand is. University of Colorado Denver, Metropolitan State University of Denver, Community College of Denver and University of Denver are the named colleges for the Denver area, a source of steady tenants but also of a lease cycle that follows the academic calendar. For getting around, Denver has interstate access via I-25, I-70 and I-76 and air service through Stapleton International Airport and Denver International Airport, which matters to commuters and to out-of-town owners planning a visit.
Investor-type guides for Denver
Before you make an offer in Denver
Run the Denver rent, tax and insurance figures through the DSCR calculator. When they clear the ratio, start an application or ask for a quote.
More Colorado markets
- All Colorado DSCR loans
- DSCR loans in Aurora, CO
- DSCR loans in Thornton, CO
- DSCR loans in Centennial, CO
- DSCR loans in Westminster, CO
- Every market we cover
Source links
- National Risk Index entry, Denver County
- Encyclopedia entry for Denver
- Colorado security deposit statute (C.R.S. §§ 38-12-102.5, 38-12-103 (as amended by HB25-1249, eff. Jan 1, 2026))
- Lodging tax reference: Colorado Department of Revenue, rooms and accommodations
- 2020 to 2024 ACS data used for Denver
Denver's figures are ACS estimates covering 2020 to 2024 and are not exact counts. RedFlagLease (CC BY 4.0) supplies the Colorado landlord-tenant notes, and the statutes are linked. Our check date is October 2026, so look for newer Denver rules before you commit.
DSCR loan availability varies by property and lender program and is not an offer to lend. See our disclosures.
Frequently asked questions
Can I run a Denver Airbnb on an investment property?
No. Denver licenses short-term rentals only at the host's primary residence, and a person may have only one primary residence, so investment properties should be underwritten on long-term rent.
What rent do DSCR lenders use for a Denver rental?
The property's own rent evidence decides: a lease, or the market rent from the appraisal. Citywide, Denver renters report a median of $1,831.
How do taxes and insurance affect a DSCR loan in Denver?
Every piece of PITIA is in the denominator. With $1,831 in rent, a 1.25 lender allows about $1,465, leaving $1,236 after median taxes of $229 a month.
How much real estate tax do Denver homeowners pay a year?
Denver owners report a median $2,751 in annual real estate taxes, an effective 0.45% (Colorado: 0.48%). Your own bill depends on the assessed value after purchase.
Will a lender count nightly rental income at a Denver property?
Depending on the lender, yes, if the property may legally be used that way and income is documented. Confirm the local permit, association rules and Colorado lodging taxes before you underwrite nightly income in Denver.
What deposit rules apply to a CO rental?
The cap is stated as follows: 2 months' rent (since Aug 7, 2023). A landlord has 30 days to return the deposit. Both come from C.R.S. §§ 38-12-102.5, 38-12-103 (as amended by HB25-1249, eff. Jan 1, 2026).
What hazard risk does Denver carry for investors?
FEMA's index puts the county at relatively high overall. A lender cares about the premium and any flood requirement, which are address-specific in Denver.
How do LLC closings work for Denver rentals?
You do not need one, and many investors close in an entity. If you use an LLC, the lender asks for formation documents and usually a personal guaranty. Talk to your attorney and accountant about structure for a Colorado property.