Buying a Second Home in Colorado: Homeowners Definitive Guide

Buying a second home in Colorado

Known for its towering mountains, breathtaking landscapes, and abundant wildlife, Colorado has become a go-to vacation spot for tourists seeking to disconnect from city life. Colorado also has vast forests, mesas, dunes, and hot springs and is a must-visit for skiing and canoeing enthusiasts. And if you’ve also fallen in love with its beauty, you might be considering buying a second home in Colorado.

But before you make a purchase, there are many factors to consider, ensuring you’re getting a good value for your hard-earned money. Determine whether you’re buying a second home in Colorado for personal use or adding it to your cash flow to make the most out of your investment.

Is Buying a Second Home in Colorado a Good Investment?

Buying a second home in Colorado is not an easy decision and requires expertise to avoid the risk of losing your money. While properties are one of the best investments anyone should get into, a vacation home works differently from your daily residence. So to answer the question if it’s worth buying a second home in Colorado, it depends if you’re making the right purchase.

But how do you know if you’re purchasing a good investment? Well, first, consider the purpose of your purchase. If your priority is to have a getaway place for family vacations or future retirement, a second home might be a good investment. On the other hand, if you’re planning to get into the rental property business, you need to consider many things before buying a second home, such as the local laws.

Since each town has varying laws for rental properties, it is ideal to consult a local agent to ensure you’re investing in the right place. For example, short-term rental is only allowed in Denver for primary residence owners, while lodging facility businesses are for properties with four or more rooms available for rental. So if you wish to invest long-term, you should consider the type of property you’re purchasing.

If you’re eyeing a house in Summit County or Breckenridge, property owners are encouraged to lease their property to locals for a year due to the declining workforce caused by the lack of housing. Nonetheless, buying a second home in Colorado comes with many advantages, such as avoiding taxes while earning an income. Thus, a good investment depends on its purpose and value to the investor.

Advantages and Disadvantages of Buying a Vacation Home in Colorado

Apart from knowing the purpose of investing in another property, there are many advantages of buying a vacation home in Colorado, from having a long-term passive income to making your travels more convenient. However, owning a second home also has disadvantages, which you should be prepared with and consider before buying.


  • Long-term Investment Return

Time is one of the most important factors when investing. So if you wish to have stability in the future, buying a vacation home can give you profit in the long run. And since vacation homes in a good location are valuable, you may be able to sell them higher than your purchase price.

  • Tax Markdown

While some vacation homeowners buy property for personal use, renting it to tourists increases your gross income. As a result, you can deduct your mortgage interest and property taxes from your rental income. So if you charge accommodation to rent, you can enjoy a tax markdown.

  • Reduce Expenses

Airbnb and Short-term rentals have become a way for property owners to pay their dues and cover other expenses. And if you want to have a vacation home in Colorado, having a rental income reduces expense costs, especially if you’re staying fewer days on your property than being occupied by tourists.

  • Getting Accustomed

Probably one of the reasons why some wanted to have a vacation home is to get accustomed to the local life. So if Colorado is your go-to destination to loosen up or see yourself retiring in the area, owning a vacation home helps you accustom and socialize with the residents.

  • Convenient Travel

Considering that Colorado offers loads of outdoor activities, a vacation home allows you to conveniently travel and pack light since you can store everything in one place. In addition, if you love skiing, it would be a hassle to bring along your equipment every time you travel. You can also go on unplanned trips without worrying about packing. 

  • Retirement Preparedness

People living in bustling cities consider Colorado a paradise allowing one to reconnect with nature, an ideal retirement place offering scenic landscape. Also, for people living in areas with extreme weather in summer and winter, a vacation home in Colorado gives you refuge.

  • Gathering Place

Owning a second home also serve as a gathering place, especially for larger families. If you’re often meeting with your extended family, a vacation home in Colorado is a great place to build long-lasting memories and have a good time. Thus, investing in a future ancestral home is definitely worth purchasing.

  • Home Swapping

If you’re new to property investment, one of the best privileges of owning one is home swapping. It allows you to stay at other vacation homes by swapping your property for days or weeks with other owners. So you can visit other places without paying rent by temporarily exchanging yours for their property.


  • Initial Buying Price

The top disadvantage of having a second home is the initial buying price. Since most buyers have higher expectations if they plan to have a personal vacation property, it will involve huge money. Furthermore, the more popular the location, means higher the property will cost. It will also include renovation and purchasing new furnishing, costing around 30% of the total sales value. 

  • Real Estate Price Fluctuates

Once you’ve considered your initial buying price, another thing to remember, real estate price also fluctuates similarly to other investment. Many factors affect fluctuation, and increasing a property’s value is not guaranteed. However, you can thoroughly research your target location to minimize the risk.

  • Higher Mortgage Cost

Another downside of buying a second home is the higher mortgage cost. Considering that lenders have suffered huge losses from the previous years, many are reluctant to finance with a lower down payment. A vacation home also has a higher interest rate and usually needs around 20%-30% down payment of the cost price.

  • Upkeep Cost

Being a property also comes with many responsibilities, such as monthly dues and home maintenance, from mowing the lawn to a leaking roof. If you aren’t planning to charge rent for your vacation home, ensure to cover the upkeep cost from your other income. So it’s either you pay a caretaker to do the work for you or personally manage the repairs. 

  • Travel Duration

Most likely, a second home will require hours of drive or an airline flight before you reach its location. Thus, the travel duration of your second home to your primary residence plays an important part, whether you can go on frequent weekend trips or seldom but a lengthened vacation.

  • Inflexible Investment

Lastly, buying a second home is a risky investment of money and time. It’s not something you buy now and quickly sell if you get tired of visiting since it isn’t a liquid investment. Thus, ensure that you’ll see yourself enjoying visiting the place in the future years.

Where to Buy a Second Home in Colorado

Aside from your purchasing budget, choosing the right location is essential when buying a second home. But with the unmatched beauty of Colorado, it can be a challenge to select the location since each area offers breathtaking views. So to help you out, we’ve narrowed down the best places to buy a second home in Colorado based on the environment, activities, pricing, and impact on tourists.


First off, the town of Avon in Eagle County is the best place to buy your second home in Colorado, offering vast mountain views. The area is highly recommended by a luxury realtor Jonathan of Spears Group, standing at 7,500 feet. In addition, the lakefront community offers affordable housing relative to Beaver Creek and Vail.

Considering its location, which features the Beaver Creek Mountains and White River National Forest, a vacation home in Avon is a worthy investment. The town of Avon rests on the Eagle River and boasts the beautiful Nottingham Lake and its surrounding park. 


Considered a skiing haven and Colorado’s most visited mountain town, Breckenridge is the perfect place for your second home if you wish to generate an income. It attracts over 3 million tourists annually, offering a more laid-back vacation and skiing charm.

The lively town of Breckenridge is not only famous during winter for skiing but a go-to tourist attraction for its Gold Rush history and plenty of outdoor activities such as hiking, mountain biking, and fly fishing. Many attractions are also in town, from museums to gourmet restaurants. However, typical homes cost nearly $1 million in this area, so Frisco and Dillon are alternative locations near Breckenridge with reasonable property value.


While Boulder doesn’t offer many nature attractions, being at the Rocky Mountains foothills makes it an ideal vacation spot that combines outdoor and urban life. It is also known for its breweries and rich history, a popular tourist destination for its ambiance.

Nonetheless, Boulder restricts property owners to a minimum of 30 day-lease. But despite the restrictions, investors are successful with property rental since there are plenty of skiing resorts one or hour two drive away from Boulder. So if you’re in search of a convenient location yet near the mountains, Boulder is the ideal place to have your second home.

Colorado Springs

Colorado Springs is another perfect location for a vacation home, offering the convenience of city life and nature adventures. Considered one of the most stunning places in the state, Colorado Springs is a must-visit for hikers, boasting the Pikes Peak and Garden of the Gods park.

The town has abundant nature and offers loads of outdoor activities, attracting over 89 million visitors annually. Thus, a second home in Colorado Springs has better revenue and lower entry costs than other famous areas, allowing you to acquire more investment. The price of a typical home in Colorado Springs cost around $400,000.

Steamboat Springs

Dubbed a Ski Town, Steamboat Springs is another winter wonderland Colorado has to offer and once a summer resort famed for its first-class skiing and smooth Champagne Powder. The town is situated in Yampa Valley and boasts natural hot springs and fishing and hunting spots.

Attracting over 500,000 tourists yearly, Steamboat Springs is an ideal place to have a second home that you can personally use and charge rentals. It is also a popular summer destination, offering many activities such as biking and hiking. The cost of a typical home in this area is around $800,000.

Important Tips When Searching for a Vacation Home in Colorado

Now that we’ve weighed the advantages and disadvantages of buying a second home in Colorado, here are some tips to start the property search.

Financial Aspect of Property Matters

It is essential to determine the purpose of buying a second home, whether for personal use or investment. As a property owner, ask yourself how often you plan to use your vacation home and when to turn it into a rental business. You should know where to get financing, taxes, possible income return, fluctuation, and market capitalization.

Find a Local Realtor

With all the financial aspects to consider when buying a property, another tip we suggest is to find an expert local realtor. Your realtor should live in the area to ensure you’re getting first-hand information about the location and property you’re planning to buy.

Rent it Out

Like any other purchase, it is best to try it out to see if the property is worth an investment. We suggest that you rent the property for a week or a month to assess if it passes your preferences and standards of a true vacation home.

Choosing the Right Location Reduces Risk

Choosing the right location is one of the most important tips when buying a vacation home, especially if you’re planning to resell it in the future. A good property location reduces risk, making you earn more than you invested.

Consider Personal Satisfaction

But most importantly, consider personal satisfaction when buying a second home. Since you’re the owner, ensure that you’re satisfied with the property, and better to have a close driving distance from your primary residence to visit anytime.

To End

Overall, buying a second home in Colorado can be tricky. Thus, it is ideal to seek a local expert real estate agent and get acquainted with the area before purchase. In addition, carefully consider everything, from its function to the required maintenance cost. Remember, investing is always risky, so make sure to plan everything out.

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