Is Durango, Colorado, a Profitable Area for an Airbnb Business?

Cozy living room in Durango, Colorado with a fireplace, couch, chairs, and table. Large window lets in natural light.

Airbnb has revolutionized how we travel, making the most of the sharing economy and giving us new ways to experience fantastic travel destinations worldwide. It's also created a platform to help individuals turn their properties into thriving hospitality businesses. One potential destination that's caught the eye of Airbnb hosts is Durango, Colorado. With picturesque landscapes, lots of outdoor recreation, and a strong sense of community, it seems like the perfect place to launch an Airbnb business. Let's look at some of the crucial factors that determine the profitability of an Airbnb and see how the Durango, Colorado, real estate market stacks up.

Why visitors love Durango, Colorado

Durango is in the southeast corner of Colorado, tucked into the heart of the San Juan mountain range and only a few miles north of the New Mexico border. The historic town is best known for its rugged natural beauty and incredible cultural attractions, annually bringing millions of visitors to Durango and the surrounding La Plata county. In a worldwide survey, Durango ranks as the most-loved tourist destination in Colorado and the 15th most-loved in the United States.

So, what makes it such a popular travel destination? There is a lot to see and do here. Families can enjoy riding on the Durango & Silverton Narrow Gauge Railroad or exploring the fascinating Mesa Verde National Park. Art lovers can soak up the local arts scene by visiting the many art galleries and boutiques. Meanwhile, food lovers will enjoy a local restaurant scene bursting with innovative flavors from around the world.

As the region attracts a diverse range of visitors seeking everything from adventure to relaxation, it's no wonder entrepreneurs are eyeing this locale as a potential place to invest in an Airbnb property.

What makes an Airbnb property profitable?

When evaluating whether to invest in homes or land for sale in Durango, Colorado, for an Airbnb, you need to know what makes short-term vacation rentals profitable and how the area stacks up.
  1. Demand: This might be the most critical factor in determining whether your Airbnb will be a profitable investment. Do people want to vacation in the area? In the case of Durango, there is a huge demand for short-term rentals, and seasonal changes don't impact that demand much. Summer is the town's peak tourist season, when families can enjoy outdoor activities like hiking, biking, and river rafting together. The winter months bring tourists looking to visit Southern Colorado's ski resorts. There are also festivals and conventions throughout the year that bring additional visitors to the area.
  2. Regulations: Some areas are starting to experience negative impacts from over-tourism. Those areas are now regulating the number of short-term rentals for tourists to slow those numbers down. However, Durango isn't one of them. The local government is a strong proponent of tourism, actively encouraging visitors to the area through marketing campaigns and investments in infrastructure. After all, tourists make up 62% of purchases at local stores, and nearly half of the revenue at local restaurants and bars comes from outside visitors. Local officials are thus keen to make laws and regulations as friendly to tourism promotion as possible, which is good news for your Airbnb business.
  3. Competition: As the popularity of Airbnb continues to grow, the competition in popular tourist destinations can be intense. Those looking to invest in land or homes for sale in Durango, Colorado, as a future short-term rental will want to do their homework on the area. Look at the types of available properties with the highest occupancy rates and what they rent for. AirDNA reports that there are currently 1,264 vacation rentals in Durango. Those rentals experience an average 63% occupancy, with a $280 daily rate and $3,824 average monthly revenue. With millions of tourists coming to the area each year, there is still room in the market for excellent vacation rental properties.
  4. Property costs: Acquiring the property is the most significant expense in starting your Airbnb rental. The Durango real estate market skyrocketed during COVID-19 as people were eager to move out of the city and experience the rural, rugged, laid-back lifestyle in Southeastern Colorado. Recent numbers indicate that properties are dropping down to pre-COVID prices. La Plata County saw a 12% price drop in the first quarter of 2023. That's great news for investors wanting to grab a deal on land or a home for sale in the area.
  5. Operating costs: After the initial purchase, you'll have operating costs that can impact your profitability. Running a successful Airbnb rental will include paying for cleaning and maintenance, utilities, property management fees, and insurance. These recurring necessities can add up quickly. Be sure to factor them into your rental rates accordingly. Fortunately, some terrific property management companies in the area can help you manage your Airbnb rental for a nominal fee, which is excellent if you plan to manage your property remotely. However, partially due to its secluded location in the San Juan mountains, utilities and other essentials may cost more in Durango than you are used to. The average bills here run slightly higher than the national average.
Durango, Colorado, is a captivating destination with massive appeal for travelers and those looking to invest in a short-term rental property. The area's popularity with tourists, supportive regulatory environment, and management competition make it a great place to invest in a vacation rental.  With decreasing property prices, now is a great time to invest in a property to make the most of your budget.

Ready to invest in Durango, Colorado, real estate?

If you are considering investing in a successful Airbnb property in Durango, you'll want to partner with a knowledgeable local expert who understands this unique real estate market. Finding the right property at the right price point is crucial to your rental business's success. Ashley Truitt is a trusted resource for identifying the ideal property that aligns with your budget and goals. Contact Ashley Truitt today and start the journey toward owning your vacation rental in Durango, Colorado.

*Header photo courtesy of Shutterstock

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