Modeling Short-Term Rental Income In Mountain Village

Are you wondering how much your Mountain Village condo could earn as a short-term rental? You are not alone. Between ski season surges, summer festivals, and strict HOA rules, it is easy to overestimate returns or miss key costs. In this guide, you will learn a clear, conservative way to model monthly income and expenses so you can make confident decisions. Let’s dive in.

Why monthly modeling matters in Mountain Village

Mountain Village sits in a true resort market where location and seasonality drive outcomes. Proximity to lifts, the free gondola to Telluride, and building amenities influence nightly rates and occupancy. Condos in core resort locations often earn higher rates, but they also carry higher operating costs and HOA dues.

Seasonality is pronounced. Winter is typically the strongest period, especially around Christmas and New Year and Presidents’ Week. Summer delivers a second peak anchored by outdoor recreation and festival weeks like Bluegrass in June and Film Festival in early September. Spring melt and late fall are shoulder periods with softer demand. A monthly model captures these swings in a way a single annual average simply cannot.

The bottom line: model by month, then roll up to annual totals. Treat holiday and festival windows as short, high-ADR intervals. Consider supply dynamics, including any condo or HOA caps on rentals that may limit realistic growth.

Gather the right inputs

Market data you can trust

Start with historical monthly average daily rate and occupancy for your unit type. Platforms like AirDNA and AllTheRooms Analytics provide trend data by bedroom count and neighborhood. Pull at least 12 months of data, and 24 to 36 months if available.

Live comps and guest expectations

Browse active listings on Airbnb and Vrbo for your building or immediate area with the same bedroom count and similar amenities. Note nightly price ranges, cleaning fees, minimum night rules, and popular features such as parking or hot tubs. This helps triangulate where your unit may sit within the local price ladder.

Regulatory and tax inputs

Confirm current short-term rental licensing, permit fees, and lodging tax rules on the Town of Mountain Village website. Check any county requirements and enforcement practices on the San Miguel County website. Review state tax guidance and remittance details with the Colorado Department of Revenue. Knowing who remits which taxes, and how often, is essential to accurate cash flow modeling.

Build a conservative monthly pro forma

Use a spreadsheet with one tab for assumptions and another for a 12-month calendar. Then follow these steps.

Step 1: Define the unit profile

• Unit type and capacity: studio, 1BR, or 2BR, with max guest count.
• Location and access: distance to gondola or lifts, parking, elevator, and amenities.
• Rules: minimum stays by season and during festivals, and pet policy.

Step 2: Gather monthly ADR and occupancy

• Pull monthly ADR and occupancy for your unit type from multiple sources. Use overlapping data from analytics platforms and local property managers.
• Identify special weeks, such as Christmas to New Year, Presidents’ Week, and major summer festival weekends. Model those periods as short intervals where ADR and occupancy rise above the monthly mean.

Step 3: Calculate gross rental revenue

• For each month, compute available nights times occupancy times ADR.
• If you set minimum stays in peak windows, reduce available bookable nights accordingly so you do not accidentally overcount turnarounds.

Step 4: Subtract variable costs

• Cleaning per stay: estimate number of bookings as occupied nights divided by average length of stay, then multiply by the cleaning fee.
• Platform fees: include host service fees and payment processing charges.
• Consumables: budget for restocking toiletries, coffee, and small replacements.

Step 5: Subtract fixed operating costs

• Property management: full-service resort managers often charge 20 to 35 percent of rental revenue. Co-hosts or self-management can be lower, but require daily involvement.
• HOA dues: confirm inclusions like utilities, internet, amenity maintenance, and any STR-related fees or assessments.
• Insurance: include a short-term rental endorsement or commercial policy.
• Utilities you pay directly: electric, gas, internet, and cable where applicable.
• Routine maintenance and reserves: set monthly allocations for repairs, annual deep cleaning, and future furniture or appliance replacement.

Step 6: Account for taxes and NOI

• Sales and lodging taxes may be collected and remitted by the platform or the owner. Model these separately so you see gross receipts and net operating income before debt service.

Step 7: Debt service and returns

• Subtract mortgage payments to calculate net cash flow to owner.
• Compute cap rate using NOI divided by purchase price, and cash-on-cash using annual pre-tax cash flow divided by total cash invested.

Step 8: Sensitivity and break-even

• Create conservative, base, and optimistic scenarios by adjusting ADR up or down 10 to 20 percent and occupancy 5 to 10 percent.
• Run a break-even analysis to find the occupancy required at your expected ADR to cover fixed costs, or the ADR needed at your expected occupancy to break even.

Example: one month, illustrative only

To show the structure, here is a hypothetical peak month for a 1BR condo. Replace all numbers with local data from your comps and quotes.

• Available nights: 30
• Occupancy: 75 percent in a peak month
• ADR: 500 dollars
• Revenue: 30 × 0.75 × 500 equals 11,250 dollars
• Average stay length: 4 nights, so about 22.5 occupied nights means roughly 5.6 bookings
• Cleaning: 175 dollars per turnover × 5.6 equals about 980 dollars
• Management: 25 percent of revenue equals 2,812 dollars
• Platform fees: about 3 percent equals 338 dollars
• HOA dues: 700 dollars for the month
• Other fixed allocations: 1,200 dollars for utilities, insurance, maintenance, and reserves
• Net before mortgage: roughly 4,218 dollars

This is a framework, not a forecast. Use it to plug in Mountain Village specific ADR, occupancy, and cost quotes.

Costs you should not miss

• Variable costs: cleaning, platform fees, consumables, and credit card processing.
• Management and marketing: 20 to 35 percent for full service is common in resort markets. Add photography and pricing software if used.
• Fixed costs: HOA dues and assessments, insurance with STR endorsement, utilities, and seasonal maintenance.
• Reserves: furniture and appliance replacement, annual deep clean, and a contingency fund for damage outside of deposits.
• Taxes and remittances: town, county, and state sales or lodging taxes, plus income tax planning. Clarify which taxes the platform remits and which you file.
• Vacancy and cancellations: add an explicit buffer for unbooked nights and a small allowance for late cancellations.

Stress test your numbers

Mountain resorts can experience weather-driven swings, changes to festival calendars, or supply shifts. Build three scenarios and a downside stress test.

• Conservative: reduce ADR 10 to 15 percent and occupancy 5 to 10 percent. Keep management at the high end of your quote range.
• Base: use the lower end of recent monthly ADR and occupancy trends for similar units.
• Optimistic: reflect upside weeks for holidays and festivals as short, discrete boosts rather than across the entire month.
• Stress test: assume an extended low season or regulatory change that reduces available nights. Confirm cash reserves cover fixed costs.

HOA and rules that affect revenue

HOA covenants can make or break an STR plan. Verify these items before you buy or list your property for rent.

• STR permissions: confirm STRs are allowed, note any minimum or maximum stay requirements, and check for rental caps.
• Registration and on-site contact: some HOAs require owner registration, specific contact protocols, or licensed property managers for STR activity.
• Fees and assessments: identify any fees specific to STRs and check recent minutes for planned assessments.
• Insurance requirements: confirm liability and property coverage standards the HOA expects.
• Municipal and county compliance: verify licensing, permit fees, occupancy reporting, and lodging tax rules with the Town of Mountain Village and San Miguel County. Clarify remittance responsibilities with the Colorado Department of Revenue.

Pre-purchase checklist

Use this checklist to assemble a defensible pro forma and avoid surprises.

• Pull 12 to 36 months of monthly ADR and occupancy for comparable unit types from multiple sources.
• Save at least five live comps in the same building or within a short walk. Record prices, cleaning fees, minimum stays, and cancellation policies.
• Request full HOA documents, rules, and recent meeting minutes. Ask directly about STR policies and pending changes.
• Get two to three quotes for full-service property management, plus separate cleaning and linen quotes if you may self-manage.
• Obtain an STR insurance quote that reflects mountain resort risks.
• Confirm current lodging and sales tax rates, registration requirements, filing frequency, and whether platforms remit portions of tax.
• Build a monthly spreadsheet with conservative, base, and optimistic scenarios plus a downside stress test.
• Verify parking, amenity access, and proximity to lifts or the gondola, along with any guest-use restrictions.

Where expert guidance adds value

A local property manager can validate current ADR and occupancy by month, plus minimum stay norms and cleaning pricing. A CPA familiar with Colorado rules can clarify lodging and sales tax remittance and help you think through pre-tax and post-tax cash flow. An insurance broker can size coverage costs for STR activity in a high-alpine environment.

If you want a seasoned view on which Mountain Village buildings and micro-locations support your income goals, and how HOA rules intersect with your use plan, connect with a broker who has deep, long-term experience in Telluride and Mountain Village. For tailored guidance and a confidential conversation about your short-term rental strategy, reach out to Jim Lucarelli.

FAQs

What is the best way to model Mountain Village STR income?

• Build a monthly pro forma that uses historical ADR and occupancy by unit type, adds short intervals for holiday and festival spikes, and includes all variable and fixed costs.

How do HOA dues impact cash flow for a Mountain Village condo?

• HOA dues can be significant and may include utilities or amenities, so confirm inclusions and any STR-related fees, then model dues as a fixed monthly expense.

Which taxes apply to short-term rentals in Mountain Village?

• Expect a combination of municipal lodging tax, county or local levies, and state sales tax, with remittance rules confirmed through the town, county, and the Colorado Department of Revenue.

Do I need a local property manager for my Mountain Village STR?

• Full-service managers are common in resort markets and often charge 20 to 35 percent of revenue, while self-management reduces fees but requires daily involvement and responsiveness.

How do Telluride festivals affect ADR and occupancy in Mountain Village?

• Major events like Bluegrass and the Film Festival typically create short windows of higher ADR and near-full occupancy, which you should model as discrete high-demand intervals, not monthly averages.

For more timely updates follow us on Instagram or Facebook at @lucarelli.telluridelifestyle and Lucarelli.TellurideLifestyle.

For more timely updates follow us on

 INSTAGRAM | FACEBOOK | LINKEDIN | TIKTOK