Breckenridge Short Term Rental Regulations

Updated as of September, 2022

Here is everything you need to know about the vacation rental regulations and how it affects you as an owner.

The first thing you should be aware of is the different jurisdictions in the Summit County area – Town of Breckenridge, Summit County Unincorporated, Dillon, Silverthorne, Frisco and Blue River. Each jurisdiction has different regulations on short-term rental licensing. 

You can find what jurisdiction a property is located in by using the Summit County GIS map here.

Blue River, Frisco, Silverthorne and Dillon do not have restrictions on short-term rentals currently but they do require a license to rent out your home. We believe that these jurisdiction will soon follow suit and pass some sort of regulations.

Even if you are a homeowner in the jurisdiction of Breckenridge or Summit County who already has everything completely set up and ready to go, there is important information that you need to know to make the most of the regulations and earn the maximum potential income you can. Along with all that, we’ll get you up to speed on prevailing thoughts about home value, tourism, and the local economy in Breckenridge post-pandemic. Please read on to learn more about the short term rental regulations in Breckenridge and Summit County Unincorporated.

What Are The New Breckenridge Short Term Rental Regulations?

If you are a homeowner in Breckenridge who would like to rent out your home as a short-term rental, you are required to obtain a short-term rental license.

This was originally enacted to control the number of vacation rentals, short-term rentals, and any rental that is used primarily for tourists and those visiting the area rather than renting long term. 

In late 2021, the Breckenridge Council determined after months of debate that locals were being priced out of the growing housing market - because owners were earning more renting short term than they were finding local renters. They felt that this caused the market to grow out of control and cause a housing shortage for locals along with an increase in parking and nuisance-related issues to a point where citizens felt like something needed to be done.

As such, there is currently a cap on the total number of short-term rentals allowed in the Breckenridge area. This effectively banned new properties from obtaining a short term rental license.

In response to the public concern that a blanket cap was insufficient because certain areas of Town are better suited for short-term rentals, the Town Council has since revised the ordinance to create four short-term rental areas within the Town, each with an individual cap. The areas are described as a Resort Properties Zone, a Tourism Zone (Zone 1), the downtown core (Zone 2), and single family residential areas (Zone 3). The map with zones outlined can be found here. The table below shows the maximum number of short term rentals allowed in each zone.

The most restrictive zone is Zone 3, where the neighborhood is comprised of residents and single family homes. This means that overtime, very few homes will be available for rental purposes and that tourists will mostly book condo located in traditional tourist zones.

It’s important to note that this only affects new properties. All existing short term rentals are not affected and are grandfathered in.

If you are a homeowner in Breckenridge who has NOT received your permit yet or would like to run a short-term rental at some point in the future, please check out this link for all the details.

What Are The New Summit County Short Term Rental Regulations?

Unlike Breckenridge, Summit County’s Town Council did not put a cap on the number of short-term rentals, but instead, split Summit County into two zones – Resort and Neighborhood. Resort zones have no restrictions on rentals whereas neighborhood zones will have a tiered system for licenses. There are 3 types of licenses in neighborhood zones that each have different restrictions: 

Type I - This license is intended for homeowners who rent their primary residence. This license has unlimited annual nightly rentals of a bedroom in the home when the homeowner is present and a maximum of 60 nights per year to rent the entire unit.

Type II -  This license is intended for second-home owners — though owners can apply for this license for their primary residence, too — and limits the number of days homeowners can rent the entire home to 135 days. This resets on September 30th each year.

Type III -  This license is intended for second-home owners who want an exemption on the nightly limit and requires a conditional-use permit. This license allows you to rent out for an unlimited number of nights but has strict requirements. 

There are different stipulations for single-family homes and multi-family complexes.

Single Family Homes

• Homes must have a 100-foot setback between residential improvements or a compliant accessory dwelling unit.

• If the lot is in excess of 40,000 square feet, the application goes through a Class 2 conditional-use permitting process, which is reviewed by county planning staff. Folks can request additional occupancy over two people per bedroom plus two if the lot is in excess of 40,000 square feet, but it will be moved to a Class 4 review, which is more stringent.

• If the lot is less than 40,000 square feet, the application goes through a Class 4 conditional-use permitting process, which is reviewed by the county planning commission.

Multifamily Building Complexes

• Homes must be part of a homeowners association with a minimum of 100 units. The complex must have either direct shuttles to ski areas or be within 100 feet of a transit stop and must include significant on-site recreational amenities, including three of the following: pool, hot tub, sauna, tennis/pickleball courts, racketball, gym, game room or other.

• The HOA must verify amenities and provide a letter denoting whether short-term rentals are a harmonious, compatible use. These units are reviewed as Class 4 unless the HOA is able to provide the suggested letter. Occupancy is two per bedroom plus two with no ability to deviate.

There is currently a moratorium in Summit County Unincorporated on issuing new short term rental permits so that the County can assess the housing market. The moratorium will be lifted as of 2/24/2023 and new regulations will be released which we believe will be more restrictive than outlined above.

If you’d like more information on Summit County’s short-term rental regulations, please click here.

How are property values tied to short-term rental income? 

Based on historical real estate data from SAR (Summit Association of Realtors) and short-term rental data from AirDNA, we can see that property values are clearly correlated to how much revenue can be generated through short-term renting. As demand for tourism has increased in Summit County, so have property values. 

Graph 1 shows the average price of real estate values from 2016 to 2021. A 94% increase in property values during this time has occurred.

Graph 2 shows demand in terms of travel spending to Summit County, Colorado. 

Graphs 3, 4 & 5 show short-term rental demand in terms of nights booked, occupancy rates, and historical market revenue. Every metric has been steadily increasing.

These trends show that as demand has grown for tourism in Summit County real estate prices have appreciated. 

How will the new short-term rental restrictions affect the market?

Short-term rental regulations have a wide-ranging impact on homeowners, from the value of homes to the income earned from renting out your home. 

There is good news and bad news, and at LocalVR, we want to ensure that you are able to take full advantage of the opportunities presented by the changes in the regulatory environment. Please note that these are all our own assumptions, but we may be wrong.

Decrease in Home Values Short Term

The Summit County real estate market has exploded in the last 5 years. Recent data shows that the market is still hot even with the new short-term rental regulations. Because valuations are closely tied to rental revenue we believe that in the short to medium term property values will cool off and decrease. 

Previously, property owners would use rental revenue to help offset the cost of owning partially or completely. Without this buffer, we think that the pool of buyers will be reduced, which will decrease demand.

Restricted Supply, Growing Demand

With a limit on the number of short-term rentals in the Summit County area, and with post-pandemic getaways increasing in popularity, we think that the rental revenue vacation rentals generate will increase. 

According to the Colorado Tourism Office, demand for travel to Colorado has increased every year since 1992 (except during COVID-19 in 2020) and we expect this trend to continue as the state, local governments and the resorts continue to invest in the community. The combination of growing demand and yet restricted supply of accommodations will put upward pricing pressure on the existing pool of existing rentals. 

What Can You Do?

There are a few strategies you should consider whether you already have your short-term rental license in Breckenridge or are thinking about purchasing a property in Summit County. 

The potential exists for homeowners in a newly-regulated area to earn more income upfront and over time as the market grows and the number of permits stays the same. 

Maximizing Bookings During Busy Seasons

Summit County’s limit of 135-day rental periods for the year will force owners and property managers to take as much advantage of peak season as possible. If you are currently being choosy about your minimum night stay limits, it might be time to reconsider. 

During the peak season, you may be able to catch travelers looking for 1 or 2-night stays, especially between gaps of reservations. You can earn more income by opening up these extra-short stays that might otherwise be left unbooked and capture high rental rates versus other days of the year. Of course, thoroughly vetting guests is necessary for reservations with shorter durations.

Pricing Your Bookings Correctly

Be aware of the current market changes in the coming months and years. The one thing we know for sure is that demand will continue to increase for vacations in the Breckenridge area, with a limited number of homes and condos available for use.

It is possible that we see price increases for the coming busy seasons without radical changes to the off-season. For now, we recommend monitoring booking sites to stay on top of inventory in the area and change your pricing accordingly.

As for what happens in Breckenridge, we have to see how it plays out. These changes might be a huge boon for homeowners who already have permits in our area.

Pricing and strategy make up a diverse and complicated set of topics. If you don’t have the time to dedicate to staying on top of both guests and the current rental market, consider getting a professional company to handle it for you.

Buy and Hold, A Long Term Strategy

If you currently own property in the Summit County area, we highly recommend holding for the long term, as over time, property values will appreciate. Even though rental revenue is now restricted, there is only so much land available in Summit County. 

Demand will slow down, but overall we think it will steadily rise due to what Summit County offers. Over time, property values will appreciate. The combination of holding for the long term while renting out to maximize revenue is the best strategy.

Using Market Changes, Data, and Technology to Your Advantage

LocalVR grew up in the Breckenridge area and we know the short-term rental market better than anyone else. We’ve developed our own high-tech software platform that we use to get our owners more income and more bookings, without compromising on keeping your home as you left it.

Managing a short-term rental is hard, and it’s even harder to keep up with the latest strategies - like those we mention in this article relating to increasing short-term rental income and even more that we don’t have time to talk about here.

If you are a homeowner who is looking to increase their revenue by 25% or more AND get better service, consider LocalVR. It’s easy to book a call with us and even easier to sign up.

LocalVR Does Short Term Rentals Better

Don’t trust your home to a big national company that doesn’t care about you. Or local short-term rental agencies that lack the data, technology, and latest strategies to manage your home. With LocalVR's Breckenridge property management, you get:

• No more late-night calls from guests. LocalVR handles everything guests need, day and night, with white-glove service

• Service is our priority. National Companies won’t prioritize you or your home over the numbers. LocalVR inspects and logs every single guest stay and we take note of any incidence of wear and tear on your home and 

• Dedicated to you: We always pick up the phone within 24 hrs.

• The latest technology: A platform that helps our owners earn up to 25% and more than other companies. Take advantage of our streamlined booking software for maximum earnings.

• The best in customization: set your own booking durations, limits, and rules

• 10,000 positive guest and homeowner reviews prove that we’re at the top of our game