Are you eyeing an Aspen Core condo for rental income but unsure whether a condotel or a traditional STR condo is the smarter play? You are not alone. In Aspen, permits, taxes, and building rules change the math more than most markets. This quick playbook breaks down what each option means, how Aspen’s rules affect returns, and the due diligence that protects your investment. Let’s dive in.
Condotel vs. STR condo in Aspen
A condotel is a condo operated like a hotel with on‑site management, centralized reservations, and services such as housekeeping and a front desk. In Aspen, these qualify as lodging‑exempt under the city’s STR program when they meet the land‑use definition, known as STR‑LE. Legacy examples include The Gant, Aspen Square, and Aspen Alps, which function as lodging‑oriented condo properties. You can see how Aspen differentiates these properties in local reporting on STR rules and examples of lodge‑style buildings. (AspenTimes overview of STR rules and lodge examples)
An STR condo is a standard residential unit you rent for fewer than 30 days at a time. In Aspen, investor units typically use STR‑Classic (STR‑C), while primary residences can use STR‑Owner‑Occupied (STR‑OO) for up to 120 nights per year. The city’s program spells out each permit type, eligibility, and rules. (City of Aspen STR program)
Fractional or residence club products also exist in Aspen and often operate like condotels from a guest perspective, but the ownership structure and use rules differ. If you are considering a residence club, read the club documents closely for usage and rental program terms. (AspenTimes coverage of branded residence products)
How Aspen licenses short‑term rentals
Aspen issues three permit types: STR‑LE for lodging‑exempt condo‑hotels, STR‑OO for primary residences rented up to 120 nights per year, and STR‑C for non‑owner investor units. Fees differ by permit: the city lists STR‑LE at a lower per‑unit fee and STR‑C/STR‑OO at a higher annual rate, and all operators must hold a city business license and remit taxes. Review the latest program details and eligibility before you buy. (City of Aspen STR program)
The city also enforces occupancy limits, requires a local contact, and asks for HOA compliance affidavits where applicable. Caps and waitlists may apply to STR‑C permits in some zones, and many permits do not transfer on sale. Aspen has moved from passive to active enforcement, so plan for full compliance from day one. (City notice on permit caps and non‑transferability)
If your target is outside city limits, Pitkin County has its own licensing, including a 4‑night minimum stay and tiered limits up to 120 nights per year, along with a historical‑use requirement in many cases. Always confirm which jurisdiction your address is in before modeling revenue. (Pitkin County STR program)
Taxes that drive returns
Aspen adds an STR excise tax to lodging stays. STR‑LE and STR‑OO pay a 5 percent excise, while STR‑C pays 10 percent. That 5‑point spread materially changes your net on the same nightly rate. Review the excise structure and how it interacts with other lodging taxes. (Legal summary of Aspen STR excise tax)
Operators must register, obtain the annual business license, and remit sales, lodging, and excise taxes through the city’s process. The city also outlines how sales and use taxes are administered across jurisdictions, which affects how and where you file. (City tax filing and sales/use overview)
Condotel or STR condo: which fits your strategy?
Choose a condotel when
- You want turnkey operations with on‑site services and brand marketing that can support stronger ADR and occupancy.
- You prefer one property manager to hold the building’s STR‑LE permit and handle most logistics for you. (City of Aspen STR program)
- You accept a rental‑pool or hotel‑style revenue split and potentially tighter owner‑use rules and program fees. (AspenTimes STR and lodge context)
Choose an STR condo when
- You want control over marketing and pricing, and you plan to self‑manage or hire a third‑party manager.
- You can secure a permit within zoning caps and are comfortable with the higher STR‑C excise tax. (City of Aspen STR program)
- Your building is warrantable or financeable under conventional terms, which can help with exit liquidity.
Operating costs and management
Condotels often deliver a distribution advantage through brand, concierge, and centralized reservations, but that comes with a revenue share. Full‑service hotel programs commonly take a larger cut, while third‑party STR managers for standalone condos often charge lower commissions, typically in the mid‑single digits to mid‑twenties depending on scope. Compare total fees, not just the headline split. (Property management commission ranges)
Your HOA can shape strategy more than you think. Some associations set minimum stays, limit owner usage, or require participation in a specific rental program. Read the CCRs and budget for reserves and potential special assessments before you underwrite net income. (Guide to condo rules and rental restrictions)
Financing and exit planning
Many condotel and hotel‑like buildings are considered non‑warrantable under agency guidelines, which can limit conventional loan options and increase required down payments. Engage lenders early to confirm whether your target unit is financeable and what reserves they will require. This also affects resale because a narrower lender box can reduce the buyer pool. (Non‑warrantable condo financing basics)
In Aspen, some STR‑C permits do not transfer on sale, which can affect valuation for the next buyer. Always confirm current rules and the property’s permit history as part of your listing or offer strategy. (City notice on permit caps and non‑transferability)
Seasonality and revenue modeling
Aspen’s booking curve is highly seasonal. Traditional lodging occupancy can reach the 60 to 80 percent range in peak months, then fall sharply in shoulder seasons. For example, local reporting shows occupancy dropping from 74 percent in March 2024 to 36 percent in April 2024. Build your model with conservative shoulder‑season assumptions. (Local occupancy snapshot)
Your due diligence checklist
Use this list before you write an offer:
- Confirm city vs. county jurisdiction, zone district, and which STR permit type the unit qualifies for. (City of Aspen STR program)
- Verify permit availability, caps, and whether any existing STR‑C permit transfers at sale. (City notice on permit caps and non‑transferability)
- Model the full tax burden, including the 5 percent or 10 percent STR excise tier, plus sales and lodging taxes. (Legal summary of Aspen STR excise tax)
- Read the HOA declarations and any rental program agreement for use limits, fees, and reserve funding. (Guide to condo rules and rental restrictions)
- Price out management options and total commissions for hotel programs vs. third‑party STR managers. (Property management commission ranges)
- Speak with lenders about warrantability and loan terms for the specific building. (Non‑warrantable condo financing basics)
- Request historical unit or building performance data by month to capture seasonality. (Local occupancy snapshot)
- Confirm licensing, business registration, and tax filing steps so you can operate day one. (City tax filing and sales/use overview)
Ready to compare specific Aspen Core buildings side by side and translate your lifestyle and return goals into a clear plan? Connect with Fiona Hagist for a focused consult on permits, financing options, and curated listings that fit your strategy.
FAQs
What is a condotel in Aspen and how is it permitted?
- A condotel is a condo that operates like a hotel with on‑site management and centralized reservations, which in Aspen typically qualifies as lodging‑exempt under STR‑LE if it meets the city’s land‑use definition. (City of Aspen STR program)
How much is the Aspen STR excise tax for investors?
- STR‑LE and STR‑OO pay a 5 percent excise and STR‑C pays 10 percent, applied in addition to other lodging taxes, which can meaningfully change net revenue. (Legal summary of Aspen STR excise tax)
Are STR permits capped or transferable in Aspen Core?
- The city caps certain STR‑C permits by zone and many permits do not transfer on sale, so availability and transferability should be verified during due diligence. (City notice on permit caps and non‑transferability)
How do Pitkin County STR rules differ from the City of Aspen?
- The county program covers properties outside city limits and includes a 4‑night minimum, tiered night caps up to 120 per year, and historical‑use requirements for eligibility. (Pitkin County STR program)
Can I finance a condotel purchase with a conventional mortgage?
- Many condotels are non‑warrantable, which often requires portfolio or specialty financing with higher down payment and reserve requirements. (Non‑warrantable condo financing basics)
How seasonal is rental demand in Aspen for planning cash flow?
- Aspen’s occupancy is highly seasonal, with local data showing a drop from 74 percent in March 2024 to 36 percent in April 2024, so build conservative off‑season assumptions into your model. (Local occupancy snapshot)
