With its breathtaking scenery, thriving economy, and fast-growing population, Denver is becoming a top destination for renters and property owners alike.
The rental market in the City and County of Denver is booming, attracting real estate investors interested in both single-unit properties and multi-unit dwellings.
Whether you own a single rental dwelling unit or multiple properties, understanding how to navigate licensing requirements, tenant relationships, and state law is critical.
Denver's drive to improve housing quality has also brought regulatory changes, such as the ordinance requiring all rental properties to meet minimum housing standards and obtain a residential rental license.
Let’s dive into the steps on how to become a successful landlord in Denver:
Step 1: Understand the Denver Rental Market
Before investing in rental properties, it's essential to understand the dynamics of Denver’s rental market. Rent prices can vary significantly based on location and the number of units, with popular neighborhoods like Wash Park and Five Points attracting tenants interested in both single dwelling units and accessory dwelling units.
The city’s strong job growth and limited public housing options continue to drive demand, making it a favorable environment for landlords. Conducting market research helps identify the ideal property type—whether a single parcel home or part of a multi-unit dwelling—and ensures competitive pricing.
Step 2: Acquire the Right Property
After assessing the market, the next step is purchasing a residential rental property. Start by evaluating the condition of the properties and ensuring they meet minimum housing standards.
If the property includes an accessory dwelling unit, confirm that it complies with local zoning codes. This will help avoid costly legal issues in the future.
Choose properties that align with your long-term goals. Whether you plan to manage multiple units yourself or work with property managers, a clear strategy will set you up for success.
Step 3: Register Your Property and Obtain a Residential Rental License
In 2023, Denver enacted an ordinance requiring all rental properties to obtain a residential rental property license. This applies to every dwelling unit offered for rent, including multi-unit dwellings, single dwelling units, and accessory dwelling units.
Here’s how the process works:
- Initial inspection: Hire certified home inspectors or a certified inspector approved by the International Code Council or the International Association of Home Inspectors.
- Meet all minimum housing standards outlined by the City and County of Denver.
- Submit your application through the government agency portal.
- Pay application and licensing fees—note that licensing fees waived provisions may apply for property owners with low-income housing or public housing properties.
- Each license is valid for four years, after which renewal is required.
- Operating unlicensed properties can result in penalties and legal action.
Whether managing a single rental dwelling unit or multiple properties, compliance with the residential rental license requirements is non-negotiable.
Step 4: Know Colorado’s Landlord-Tenant Laws
Every Denver landlord must stay informed about tenant rights, state law, and local housing codes. Here’s what you need to know:
- You must provide tenants with proper notice before entering their premises, increasing their rent, or terminating their lease.
- Be transparent about application fee costs and screening criteria.
- Colorado allows for a security deposit, but it must be returned within 30 days unless otherwise agreed.
- The license requires you to maintain livable conditions per the International Code Council’s guidelines.
Remaining legally compliant helps you avoid disputes and ensures long-term stability in your rental business.
Step 5: Draft a Legally Sound Lease Agreement
A well-crafted lease is essential for protecting both property owners and tenants. It serves as the foundation of a clear, professional rental relationship.
Your lease should clearly state the rent amount, due dates, and any applicable late fees. To avoid future disputes, it must also outline who is responsible for maintenance and repairs.
Additionally, the lease should detail rules for the dwelling unit, including pet policies, occupancy limits, and other property-specific guidelines.
To ensure legal compliance, it’s best to use lease templates that follow City and County regulations and incorporate relevant state law provisions.
Step 6: Screen Tenants the Right Way
Effective tenant screening is key to finding reliable renters while upholding tenant rights. In Denver, specific guidelines must be followed to ensure fairness and transparency throughout the process.
Landlords must clearly disclose application fee charges and keep them reasonable. Applications should be reviewed in the order they are received to avoid potential discrimination issues.
While screening for income, background, and rental history is standard practice, landlords must remain compliant with fair housing laws to protect tenant rights.
Partnering with experienced property managers or a professional property management company can simplify the screening process while ensuring all legal requirements are met.
Step 7: Keep Your Property Maintained
A successful Denver landlord prioritizes maintenance:
- Schedule regular rental inspections and document issues.
- Respond quickly to repairs, especially those affecting minimum housing standards.
- Keep the dwelling unit safe and up to code.
For owners of multiple units, working with professional property management services helps manage the upkeep more efficiently.
Step 8: Handle Finances Like a Pro
Proper financial management means tracking rent income, expenses, property taxes, and all license and application fees.
Consider using property management software or hiring a CPA familiar with Denver tax laws and reporting requirements.
Step 9: Handle Tenant Issues and Evictions Legally
Even with great tenants, disputes can still happen. Landlords should always be prepared to handle issues professionally and in accordance with the law. If rent is late, consider offering a payment plan to help tenants get back on track. For lease violations, make sure to issue proper legal notices as required by law.
Evictions should only be filed as a last resort and must follow formal legal procedures. Avoid illegal actions like changing locks or shutting off utilities. Following the law and keeping clear documentation protects you and your property throughout any dispute.
Step 10: Consider Professional Property Management
Managing rental properties, especially multiple units, can be overwhelming. Hiring experienced property managers ensures your properties stay compliant, profitable, and professionally maintained.
A trusted property management company will:
- Handle marketing and tenant placement
- Manage rental inspections
- Ensure adherence to minimum housing standards
- Assist with license renewals and coordination with certified inspectors
Thrive with Confidence as a Landlord in Denver
Becoming a successful Denver landlord involves more than just owning a residential rental property. It means complying with the city’s evolving laws, offering safe housing, and staying proactive in your management approach.
Whether you own a single-unit property or manage multiple properties, following the steps in this guide will help you succeed.
Need help with licensing, inspections, or tenant management? Let Sheepdog Property Management handle the details so you can focus on growing your rental portfolio.
Contact us today and let the experts in Denver property management help you thrive!
