DSCR loans for long-term rental investors in Denver, CO

Long-term leases in Denver

Washington Park and Highlands lease higher and Montbello lower. Check the ratio carefully since price is high, and use signed leases.

Areas to pull comps first

• Highlands and Sunnyside. older bungalows and new townhomes northwest of downtown
• Capitol Hill and Cheesman Park. apartment-dense neighborhoods near the state capitol

What long-term rental investors should know about DSCR loans

A long-term rental is the simplest DSCR deal to underwrite. The lender takes the monthly rent from a signed lease or from the appraiser's market rent schedule, divides it by the full monthly payment, and approves the loan on that ratio plus your credit and cash.

Month-to-month tenants are treated more cautiously than annual leases where lender guidelines allow it, so ask what the lender wants for a tenancy that has no end date. Section 8 and other subsidized leases are generally acceptable where lender guidelines allow it, with the contract rent shown on the lease and the housing authority paperwork.

What is different in Denver

Two Census medians frame the Denver rental market: gross rent of $1,831 a month, which is close to the Colorado median of $1,761, and a home value of $616,000, which is about 14% above the Colorado median of $539,400. Annual median rent is about 3.6% of the median home value in Denver. That is a lean ratio that leaves little room for taxes, insurance and dues, but it blends every housing type, so a house on a specific street needs its own rent comparables.

Renters occupy 51.2% of Denver's occupied homes, well above the Colorado median of 34%, so tenant demand is deep and investors compete mainly on condition and location. Median household income of $94,718 (close to the Colorado median of $95,470) sets the ceiling for rent growth, and 48% of renters already spend 30 percent or more of income on rent.

Colorado limits what a Denver owner may hold as a deposit: 2 months' rent (since Aug 7, 2023). The statute is C.R.S. §§ 38-12-102.5, 38-12-103 (as amended by HB25-1249, eff. Jan 1, 2026). Colorado gives a landlord 30 days after the tenancy ends to return a deposit, an easy deadline to miss without a checklist. Rent increases in Colorado: No; counties and municipalities are prohibited from enacting rent control (C.R.S. 38-12-301).

Rental registration, inspection and nightly-stay rules differ by city, and we have not verified Denver's from a municipal source. A short call to the city and Denver County before you make an offer is cheap insurance. Nightly stays carry state tax in Colorado. Colorado requires a sales tax license for an owner who rents rooms or accommodations, with tax generally due on stays under 30 consecutive days, and a marketplace that collects for the owner typically covers state, local and lodging taxes, while county or city lodging filings can be separate.

A gross yield of 3.6% means Denver is a market where purchase prices run ahead of rent, so a 1.0 ratio generally takes a larger down payment or a property priced below the local median. Homes of this vintage age unevenly, so rent comparables should come from properties in similar condition. Renter-heavy markets like Denver favor investors with a clear tenant profile, whether workers, students or families.

Roughly 7% of units in Denver sit vacant, and the share of rentals available for rent is 5.5% at the survey's snapshot.

The Denver math at the medians

Try the math at the medians. With rent at $1,831 and taxes near $229 a month, a 1.00 DSCR leaves $1,602 for everything else in the payment, a 1.20 ratio leaves $1,297, and a 1.25 ratio leaves $1,236. Any real property will differ, but the exercise shows how little room insurance and dues can take.

More to line up

Property management is a cost to model. Depending on the program, lenders do not deduct it in the ratio, but your own return will, and out-of-town owners usually hire it anyway.

File checklist

• Association dues and any special assessments
• Utility responsibility written into the lease
• Tax estimate for the purchase price, not the seller's bill
• Age of the roof, HVAC and water heater
• Signed lease or appraiser's market rent schedule

Go deeper

• DSCR loans in Denver, CO
• Program guide for this strategy
• First-Time Investors in Denver
• LLC Investors in Denver
• All Colorado DSCR loans

Have a long-term rental investors deal in Denver in mind? Describe it or begin an application, and use the calculator to preview the ratio.

Sources and data notes

• Wikipedia article, Denver
• Text of C.R.S. §§ 38-12-102.5, 38-12-103 (as amended by HB25-1249, eff. Jan 1, 2026) for Denver landlords
• State rule cited for Denver hosts: Colorado Department of Revenue, rooms and accommodations
• American Community Survey tables, Colorado
• National Risk Index entry, Denver County

Denver's figures are ACS estimates covering 2020 to 2024 and are not exact counts. Verified October 2026. Ordinances and statutes change, so confirm before acting. Availability varies by property and program and is not an offer to lend. See disclosures.