If you're looking at a listing in Manitou Springs with "strong Airbnb income" in the description, run the math before you run the numbers on your offer. The city allows roughly 56 to 58 short-term rental permits total, citywide, under a formula tied to its total housing stock. AirDNA's most recent count puts active short-term rental listings in Manitou Springs at 242 as of June 2026. That gap, more than four active listings for every legal permit, is not a rounding error. It's the reason a rental-income figure attached to a listing can vanish the moment you close, and it's the single most important thing to verify before you write an offer on anything marketed as an investment property here.
This isn't a story about whether short-term rentals are good or bad for the town. It's a story about what actually survives a sale, and what a buyer needs to confirm directly with the city before treating advertised rental income as real.
The Math Behind the Cap
Manitou Springs limits short-term rentals to 2% of the city's residential structures, recalculated each year using population and housing counts from the State Demography Office. Using the city's own 2013 baseline of 2,800 residential structures, that formula produces a ceiling of 56 permits. A 2022 legal review published by the Colorado Bar Association put the current figure closer to 58. Either way, the number sits in the mid-fifties, and it has for years.
Unlike some Colorado mountain towns that run a formal waitlist once a cap fills, Manitou's ordinance is blunter: the city will not accept new applications once the maximum has been reached. There's no queue to join, no annual lottery, no estimated wait time. The door is either open or it isn't, and the only way to find out is to ask the Planning Department directly or check the city's STR web map for the address in question.
A 500-foot separation rule adds another layer. Even if the citywide cap has room, a specific property might not qualify if another permitted STR sits within that radius. Two nearby homes on the same block can have completely different eligibility, which is exactly the kind of detail a buyer should confirm directly with the city.
What Happens to the Permit at Closing
Here's the part that catches buyers off guard. Manitou Springs treats an STR permit as tied to a specific owner, not to the property. The city's own operations page states plainly that the permit expires upon sale or transfer of the property, including a change between private ownership and a corporation. That means the seller's rental income, no matter how well documented, does not automatically come with the house.
You'll find some conflicting information on this if you search around. A local real estate blog suggests that newly issued permits "run with the land" while only some grandfathered ones transfer. The city's official language doesn't carve out that distinction, stating that the permit shall expire upon sale or transfer, full stop. When two sources disagree on a rule that determines whether your rental income model works on day one of ownership, that disagreement is itself the reason to call the Planning Department at (719) 685-4398 and ask about the specific address before you write a contract, not after.
For any home where you'd need a brand-new permit, remember the requirements: the owner must occupy the residence at least 185 days per year, and if approved, you're required to rent it a minimum of 21 days annually just to keep the permit active. That combination rules out true absentee ownership. Manitou's system was built for owners who live in the home most of the year and rent it occasionally, not for a portfolio play.
If you're set on preserving STR eligibility, the practical move is a contract contingency: make the purchase conditional on written confirmation from the city that the property qualifies for a permit, or that an existing permit will in fact transfer to you. That protects you if the answer turns out to be no.
Where the Other 180-Plus Listings Come From
If only 56 to 58 permits are legally available, where do the other 180-plus active listings AirDNA is tracking come from? A few explanations, and none of them should be mistaken for a loophole you can count on.
Some listings are booked for longer stretches. A longer-term furnished rental earns differently than a nightly Airbnb and shows up in different market data than what a vacation-rental listing implies.
Some are grandfathered units whose permits predate the current cap and whose transferability, as noted above, is genuinely unsettled in public sources. And some are simply unpermitted. This isn't a new problem for the city. Back in 2015, before the current ordinance existed, Manitou officials estimated that roughly 40% of hosts advertising on sites like Airbnb and VRBO were doing so without any permit at all, according to reporting on the city council meeting where the rules were debated. That history is exactly why the current system requires the permit number to appear in every listing ad and why the city can revoke a permit for noncompliance, with an appeal window of 90 days. If a listing you're considering doesn't have a permit number in its own advertising, verify its permit status before factoring that income into your offer.
Modeling the Income Correctly
Even for the units operating legally, the income picture has softened. AirDNA's data through June 2026 shows citywide short-term rental revenue in Manitou Springs down 18% year over year, with occupancy down 7.7% to 52% and average daily rate down 5.7% to $206. Active listings, meanwhile, rose 13.6% over the same period, more supply chasing softer demand. Whatever number a seller hands you for "last year's Airbnb income" needs to be checked against that trend, not just accepted as a baseline for next year.
There's also a tax dimension worth building into any investment model. According to iAmHoste, a state law that took effect January 1, 2026 reclassified non-owner-occupied short-term rentals as lodging property for tax assessment purposes, which typically raises the property tax bill on units that aren't anyone's primary or secondary residence. Given that Manitou already requires owner-occupancy for new permits, this mostly affects older, grandfathered, non-owner-occupied units, but if you're buying one of those, the assessment on your current tax bill may already reflect this reclassification differently than it did on the seller's older statements.
Colorado's 2026 legislative session closed on May 13 without passing a statewide preemption law for local STR rules, so there's no signal that Manitou's cap, separation rule, or occupancy requirement will loosen anytime soon. Local control stays local control here.
One more thing worth flagging while you're underwriting a purchase: Manitou's home sales volume is thin enough that headline median prices bounce around depending on which source you check. As of September 2026, one portal's "last month" median sale price sits at $736,000, another shows $817,000 based on just three closings, and a broader home-value index runs closer to $548,500. None of those numbers is wrong exactly, they're just built on so few transactions that a single high-end sale or a single fixer-upper can swing the average by six figures. Treat any portal median as a starting conversation, not a number to price an offer against.
A Few Questions Worth Asking Before You Write an Offer
Does the current STR permit transfer to me automatically? Not by default. The city's rule is that the permit expires on sale or transfer. Confirm the specific property's status with Planning before assuming otherwise.
If there's no existing permit, can I get a new one? Only if the citywide cap has room and the property meets the 500-foot separation rule. Check the city's STR web map for the address, and be ready to occupy the home at least 185 days a year if approved.
What if the seller's listing shows strong rental income but no permit number in the ad? Ask for it directly. Every legal listing is required to include the permit number. If it's missing, verify permit status before you factor that income into your offer at all.
If you're looking at a Manitou Springs property with short-term rental potential in mind, the permit status is worth confirming before the inspection period, not during it. Curtis Ryan Group can pull the city's STR eligibility map for a specific address and walk through whether the property may qualify for a new permit, so the number on the listing and the number you can count on are the same one.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
