The quick sale of a 4,900-square foot multi-family property in Denver’s Sloan’s Lake neighborhood shows the desirability of properties that are legally permitted to be used as short term rentals for investors. A growing number of cities around the world are putting a cap on the number of short term rental permits issued.
The five-unit property located on 4000-4010 West Conejos Place was sold for $1.9 million on July 17, according to Mile High CRE. This property has a lodging license with the City and County of Denver that allows the property to run short-term rentals. The proximity to event venues makes the lodging license quite valuable.
Investors are willing to pay a higher price per unit for properties that can be used as short term rentals because of the higher income these properties bring in.
“The property was on the market less than a week before we had a full price offer,” said Robert Bratley, first vice president of CBRE who represented the seller. “Short-term rentals have made a heroic comeback since the pandemic began in March. By the time this property closed, the occupancy and rates were backup to 80 to 90 percent of their previous levels, which shows the strength and value of properties that can attain a lodging license.”
According the the listing, in 2019 the NOI for the property was $136,043 which equates to a 7.16% cap rate on the list price.
The buyer is expected to run both short and long term apartment rentals.
photo credit: RE Colorado