Denver Rental Market: Trends, Taxes, And Insights
Owning or renting in Denver requires more than just a love for mountain views, craft beer, and bluegrass bands; it requires an understanding of the Denver rental market. The city’s rental market has changed drastically over the past decade, shaped by population growth, shifting economic conditions, and growing property values. Whether you’re a renter looking for the best deal, an investor searching for profitable opportunities, or a homeowner navigating property taxes, understanding the Denver rental market is crucial. Below we will break down how Denver’s rental market has fared historically, what to pay attention to now, and how to get involved.
Looking to optimize your current rental or get involved in the STR rental market?
Understanding the Denver rental market
A brief history of Denver’s rental market
Denver’s rental market has transformed over the past two decades, fueled by a growing economy, tech sector expansion, and migration from higher-cost cities like Los Angeles and San Francisco, which has changed both Denver’s economy as well as politics when it comes to things like entitlement.
- Early 2000s: Denver was an affordable alternative to California, with median rents below national averages.
- 2010s Boom: The city’s population surged, rents spiked, and investors flooded the market.
- Pandemic Reset (2020-2022): Rents stagnated briefly due to remote work shifts but rebounded as urban demand returned.
- 2023-2025 Growth: As of 2025, rental prices are stabilizing after a sharp rise, and property taxes have become a pretty big concern for landlords. Denver still suffers a lack of inventory, which means rentals should continue to be pricey from a macro perspective.
Current trends in the Denver rental market
Rental price trends in 2025
For the first time in nearly a decade, Denver’s rental prices have dipped by 5% year-over-year. While this may seem like a win for renters, the reality is more nuanced. The drop in rent is largely due to an increase in available housing, coupled with slightly slower population growth and economic shifts affecting real estate investment.
Here’s what’s driving the change:
- More apartment units hitting the market: Developers have been building aggressively, particularly in RiNo, Union Station, and the Highlands. This new supply has helped stabilize prices, but it has also left luxury buildings scrambling to fill vacancies.
- Fewer new residents moving in: Denver’s population boom of the 2010s has slowed. While people are still relocating to Colorado, the pace has dropped, meaning fewer renters are competing for available units.
- Higher interest rates impacting investors: With mortgage rates rising, more potential landlords are holding back on purchasing rental properties, leading to shifts in the rental landscape.
Despite this price drop, Denver remains a high-cost city compared to other parts of Colorado and the U.S. Denver’s rental market is competitive but more affordable than Boulder and on par with other rising U.S. metros. The chart below highlights how Denver stacks up against Boulder, Colorado Springs, and the national average:
Occupancy rates and demand
While rental demand in the Denver rental market remains strong, some sectors are seeing higher vacancy rates due to shifting renter preferences. Luxury apartments in downtown Denver face the biggest challenges, as an oversupply of high-end, amenity-rich units has led landlords to offer incentives like free rent or reduced security deposits.
On the flip side, affordable rentals in Aurora, Lakewood, and Thornton continue to see strong demand, attracting renters seeking more space at lower costs.
- Lower rental rates compared to downtown Denver
- Better access to single-family home rentals for those priced out of the housing market
- Proximity to major employers without the high price tag of city living
At the same time, short-term rentals (STRs) continue to perform well, despite strict city regulations. Denver remains a major tourist destination and business hub, making STRs on platforms like Airbnb and Vrbo an attractive option for property owners.
Here’s how different segments of the rental market are performing in 2025:
| Rental Segment | Occupancy Rate Trend | Key Factors Affecting Demand |
|---|---|---|
| Luxury apartments (Downtown, LoDo, RiNo) | ⬇ Declining | High supply, fewer high-income renters, oversaturated market |
| Mid-tier rentals (Capitol Hill, Sloan’s Lake) | ⬆ Stable | Affordable options still in demand, but increased competition |
| Budget rentals (Aurora, Lakewood, Thornton) | ⬆ Increasing | Renters looking for cheaper alternatives, strong job markets nearby |
| Short-term rentals (STRs) on Airbnb/Vrbo | ⬆ Strong | Tourism recovery, business travel, remote workers booking mid-term stays |
Cost of living and affordability in Denver
Rental affordability compared to income levels
Denver has long been an attractive place to live, but affordability is becoming a growing concern, and many residents fear that Colorado real estate is the way of California. As of 2025, the average rent-to-income ratio for Denver renters sits at 32%, slightly exceeding the nationally recommended limit of 30%. While this may seem like a small difference, it translates into thousands of dollars annually that renters must account for when budgeting for their rental plans.
Here’s a breakdown of affordability metrics in Denver:
| Category | Denver Average | National Average | Affordability Benchmark |
|---|---|---|---|
| Median Household Income | $85,000 | $78,000 | – |
| Average Rent (1BR) | $1,653 | $1,559 | – |
| Rent-to-Income Ratio | 32% | 30% | ≤30% recommended |
| Affordable Rent Threshold | $2,125 | $1,950 | 30% of income |
Why affordability is a challenge
Many Denver renters stretch their budgets to afford housing, often cutting back on discretionary spending or opting for shared living arrangements. Some are moving to nearby cities like Aurora or Lakewood to find better deals, while others negotiate with landlords for lower rates or lease incentives. If rents continue to rise while incomes stagnate, affordability will remain a top issue in Denver’s rental market.
We spoke to Daniel Di Cerbo of Willowdale Equity, on why he thinks that Denver is just part of a trend of renting in the Western US.
The rental market in the Western US tends to be more affected by high real estate prices and limited land availability, which drives up rent costs. On the other hand, the Eastern US offers more diverse market conditions, with some areas experiencing slower rent growth but also more affordable options, especially in smaller cities and suburban markets.
Utilities, insurance, and hidden costs for renters
Renters in Denver don’t just pay for rent, additional costs can add $250 to $400 per month to their budgets. These hidden costs often make renting more expensive than it initially appears, particularly if they opt for extras like renters’ insurance, pet fees, and parking fees. Remember, just as homeowners pay homeowners insurance, renters can pay renters’ insurance as well.
Here’s what a typical renter in Denver can expect:
| Expense | Monthly Cost | Notes |
|---|---|---|
| Utilities (Electricity, Water, Internet) | $175 – $250 | Higher for larger apartments or houses |
| Renter’s Insurance | $15 – $30 | Required by most landlords |
| Parking Fees (Downtown) | $100 – $200 | Garage parking can cost even more |
| Pet Fees | $25 – $50 | Most rentals charge per pet |
Want to discover ways to reduce fees and boost your rental income each month?
Property taxes and their impact on rental prices
How property taxes are calculated in Denver
Denver’s property tax formula is simple, but its effect on landlords and rental prices is significant. Higher taxes often lead to rent increases, while lower taxes can keep rental rates competitive. For investors, tax burdens vary across Colorado cities, influencing profitability and ROI.
Formula:
Property tax comparison: Denver vs. other Colorado cities
Real-life tax calculation for an investment property
Understanding how property taxes impact rental profitability is essential for Denver real estate investors. Let’s break down a real-world example of how property taxes are calculated in Denver and what that means for rental owners.
Imagine you’ve just purchased a rental property in Denver valued at $600,000. As an investor, you need to factor in property taxes as a recurring expense when determining rental pricing and long-term profitability.
Step 1: Determine the assessed value
Colorado taxes only 6.95% of a home’s market value, meaning a $600,000 property has a taxable assessed value of $41,700.
Calculation:
$600,000 × 6.95% = $41,700 (Assessed Value)
Step 2: Apply the Mill Levy
Denver’s 2025 mill levy is 72.116 mills, meaning $72.116 per $1,000 of assessed value.
Calculation:
$41,700 × 0.072116 = $3,007.50 (Annual Property Tax)
This recurring cost is either paid by the owner or factored into rental pricing.
What this means for rental property wwners
For a Denver landlord, $3,007.50 in annual property taxes represents just one of many ongoing costs that impact rental income. To understand its impact on profitability, let’s break it down further:
- Monthly cost: $3,007.50 ÷ 12 = $250.63 per month
- If renting at $2,500/month, property tax is ~10% of revenue.
To remain profitable, investors need to consider additional costs like maintenance, property management fees, insurance, and mortgage payments when setting rental rates.
For investors comparing cities, Denver’s property taxes remain lower than Boulder’s, where mill levies are higher but higher than some suburbs like Colorado Springs, where rates are more favorable.
The Short-term rental market in Denver
Airbnb, Vrbo, and Denver’s short-term rental laws
Unlike some Colorado cities that allow unrestricted STR investments using platforms like AirBnb and Vrbo, Denver has a primary residence requirement. This means:
- Only properties used as a primary residence can be legally rented on Airbnb or Vrbo.
- Investment properties cannot be rented short-term unless they qualify under specific exemptions.
- A short-term Rental (STR) license is required, with annual renewal fees.
- Illegal short-term rentals face steep fines, with penalties reaching $999 per violation per day.
- Because of these regulations, many investors have shifted their focus to mid-term rentals (30+ day leases), catering to traveling professionals, remote workers, and corporate stays.
Profitability analysis for short-term rentals
Despite the restrictions, STRs remain highly profitable for homeowners who meet legal requirements. Denver’s status as a tourism hub and business center keeps demand strong, particularly for well-located properties near downtown, Union Station, and entertainment districts.
| Metric | Short-Term Rental (Airbnb) | Long-Term Rental |
|---|---|---|
| Average Nightly Rate | $180 – $250 | – |
| Average Occupancy Rate | 70 – 80% | 100% (fixed lease) |
| Monthly Revenue Estimate | $3,800 – $5,500 | $2,000 – $3,000 |
| Regulatory Restrictions | Strict (STR license required) | No special licensing |
Investment opportunities in Denver’s rental market
Denver remains a strong market for real estate investors, but choosing the right neighborhood is super important. In the world of real estate and rentals, location is everything. Low cost of entry and high upside is a strategy that many investors prefer, but these locations will be in Denver’s surrounding suburbs more so than prime central Denver. Depending on the investment strategy, some areas offer better long-term rental stability, while others thrive in the short-term rental (STR) market due to tourism and business travel demand.
Here’s a breakdown of where investors should focus in 2025:
Denver’s rental market offers opportunities for both long-term and short-term investors, but choosing the right neighborhood is key to maximizing returns. Some areas provide steady, reliable income from long-term tenants, while others thrive on high nightly rates from short-term guests. Here’s a breakdown of the best investment areas based on rental strategy.
Long-term rentals: Aurora & Lakewood
- More affordable properties compared to Denver’s core
- Strong rental demand from families, professionals, and students
- Lower vacancy rates, ensuring consistent occupancy and cash flow
Short-Term Rentals: Downtown, LoHi, RiNo
- High Airbnb profitability, with premium nightly rates
- Strong tourism market and year-round visitor demand
- Appealing to business travelers, thanks to proximity to corporate hubs and event venues
What’s special about these areas?
For long-term rentals, Aurora and Lakewood offer more affordable home prices, making it easier for investors to enter the market. These areas attract local workers, families, and students, leading to steady occupancy and lower vacancy rates compared to downtown Denver, where luxury apartments are struggling with oversupply.
For short-term rentals (STRs), Downtown, LoHi, and RiNo remain the most profitable areas for Airbnb and Vrbo listings. These neighborhoods draw tourists and business travelers, benefiting from high nightly rates and year-round demand. Despite Denver’s STR licensing restrictions, legally operated rentals here outperform long-term leases, thanks to walkability, killer nightlife, and proximity to event venues and corporate hubs.
Navigating the Denver rental market as a renter
Finding a great rental in Denver requires more than just searching listings: it’s about timing, negotiation, and understanding how to maximize your leverage as a tenant. While Denver’s rental market has cooled slightly in 2025, competition remains strong for well-priced properties, especially in desirable neighborhoods. Renters who plan can secure lower monthly payments, better lease terms, and additional perks by using the following tactics.
Best time to rent: Winter vs. peak season
| Factor | Winter (Jan-Feb) | Peak Season (Spring-Summer) |
|---|---|---|
| Rental Demand | Low – fewer people moving | High – increased competition |
| Landlord Willingness to Negotiate | High – units stay vacant longer | Low – demand is strong |
| Potential Savings | – Discounts on rent – Free rent incentives | – Higher rent prices – Fewer discounts |
| Availability of Move-In Specials | – More likely | – Less likely |
Negotiate longer leases (18-24 Months)
Landlords value lease stability, and many are willing to offer lower rent rates to tenants who commit to 18- to 24-month leases. By securing a longer-term agreement, renters reduce the risk of unexpected rent increases when their lease renews, providing financial predictability. This strategy is particularly effective in slower rental markets, where property owners prefer guaranteed occupancy over potential vacancies. In many cases, landlords may offer a 5-10% discount on rent for tenants who opt for an extended lease, translating to significant savings over time.
Lease incentives to ask for
| Incentive | How It Helps Renters | Where It’s Most Common |
|---|---|---|
| Free Rent for the First Month | Reduces upfront costs and makes moving more affordable | New apartment buildings, high-vacancy properties |
| Waived Security Deposit | Lowers move-in expenses by removing deposit fees | Luxury buildings, corporate-owned complexes |
| Discounted Parking Fees | Saves renters $50-$200 per month on parking | Downtown apartments, high-demand areas |
The road ahead for Denver’s rental market
Denver’s rental market has been incredibly resilient in recent years, and although recently down year over year, the future looks bright. Denver’s rental market is evolving with affordability, property taxes, and short-term rental regulations reshaping the landscape. Renters will need to strategize to find the best deals, whether by negotiating long lease terms or considering more affordable suburban areas in and around Denver Metro. Landlords must account for rising property taxes, which may impact rental pricing and profitability. For investors, targeting high-demand neighborhoods with good affordability-whether for long-term stability or short-term rental income-will be important to maximizing returns. It’s important to stay versatile, as market conditions can shift. That being said, for investors and landlords looking for a stable long term play, Denver’s rental market has among the highest upsides in the nation.
FAQ
How does Denver’s rent control policy affect landlords and tenants?
Denver does not have rent control laws, meaning landlords can raise rent without legal caps as long as they follow lease agreements and provide proper notice. While this allows landlords to adjust prices based on market conditions, it also means renters face potential steep increases when renewing leases. To avoid unexpected hikes, tenants should consider longer lease terms (18-24 months) or negotiate renewal caps in their lease agreements.
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