Wondering how to offset your mortgage in Central Park without risking a fine or HOA conflict? You have several house‑hacking options in Denver, but each one comes with rules you need to follow. In this guide, you’ll learn the legal paths to cash flow that work in Central Park, the permits and licenses you will need, and smart next steps to get started. Let’s dive in.
What house hacking looks like in Central Park
Central Park offers mixed housing types, transit access, and active HOAs, which shapes what works for house hacking. You can pursue a legal duplex or 2–4 unit purchase, add an ADU, rent rooms, or run a primary‑residence short‑term rental. The right choice depends on your lot, HOA covenants, budget, and timeline.
Legal paths you can use
Build or convert an ADU
Denver made ADUs broadly legal citywide after a zoning update that took effect December 16, 2024. That change opened more lots for attached, detached, and internal ADUs, all still subject to design and permit rules. Review Denver’s ADU permit guidance for allowed types, owner‑occupancy rules in single‑unit zones, and the steps for zoning, building, and sewer reviews. Homeowners must use a licensed contractor for construction permits.
- Learn more about the citywide update: Denver expands ADU allowances
- Permit process and standards: Denver ADU permits
Buy a 2–4 unit and live in one
Purchasing a legal duplex, triplex, or fourplex and living in one unit is a classic way to reduce your payment. You avoid conversion permits and can rent other units long‑term once you obtain Denver’s residential rental license. Financing is different from a single‑family loan, so talk with a lender that handles owner‑occupied 2–4 unit products.
- Financing overview: Conventional loans for 2–4 units
Rent rooms in your primary home
Room rentals of 30 days or longer fall under Denver’s residential rental licensing program. You must meet inspection standards and hold a valid license to offer the space as a long‑term rental. Shorter stays are treated as short‑term rentals.
Operate a primary‑residence STR
Denver allows short‑term rentals in your primary residence if you obtain a city STR license. You must show proof of primary residency, include your license number in listings, carry required insurance, and register for local taxes. Advertising an STR without a license is unlawful.
- STR rules and primary‑residence requirement: Denver STR FAQ
Key rules and permits in Denver
ADU permits and design
ADUs require coordinated reviews for zoning, building, and sewer or drainage, plus trade permits. Only one ADU per zone lot is allowed, and size and design must be compatible with the main home. Expect to prepare site plans and elevations as part of your submittal.
- Full guidance: ADU permits and submittal steps
Residential rental licensing for long‑term rentals
Denver requires a residential rental license for any property offered for 30 days or longer. Licenses require a third‑party inspection and are enforceable with fines for noncompliance. Single‑unit rentals have been covered since January 1, 2024.
- Program overview: Residential rental licensing
STR licenses, insurance, and taxes
To operate a short‑term rental in Denver, you need a city STR license tied to your primary residence. The city requires at least $1,000,000 in liability coverage or equivalent platform coverage, and you must register for and collect lodger’s tax on stays under 29 nights. Keep your license number on every listing and renew annually.
- Apply and review requirements: Short‑term rental licensing
- Business tax setup and lodger’s tax info: Denver Treasury business taxes
HOAs and metro districts in Central Park
Many Central Park sub‑neighborhoods have HOAs or metro districts with covenants that can limit rentals or short‑term rentals and control exterior changes like ADUs. City permits do not override HOA rules, so confirm CC&Rs and approval steps before you plan. Build your timeline to include any required board review.
- Context on citywide ADU changes and local overlays: Citywide ADUs information
Safety, inspections, and certificates
Conversions often trigger code requirements for egress, smoke and CO detection, and sometimes fire protection. Do not rent space until you meet code and, if required, obtain a certificate of occupancy. The rental license inspection is separate and verifies minimum habitability standards.
Financing your plan
Owner‑occupied 2–4 units
FHA, VA for eligible borrowers, and conventional programs can finance owner‑occupied 2–4 unit properties. Down payment, reserves, and how lenders count rental income vary by program. Get pre‑approved for the exact property type you want to buy so you know your numbers.
- Program primer: Conventional loans for 2–4 units
ADU financing basics
You can fund an ADU with a cash‑out refinance, a HELOC, a renovation or construction loan, or a specialized ADU product. Compare total project cost, interest, and expected net rent after license, insurance, maintenance, and vacancy. Recent local reporting suggests modest ADUs can run about $200,000 to $400,000 or more depending on size and complexity.
- Market context on ADUs and costs: Denver ADU standards and updates
Taxes, insurance, and cash flow basics
- Short‑term rentals: plan for lodger’s tax on stays under 29 nights, a city business tax account, and $1,000,000 in liability coverage or platform coverage.
- Long‑term rentals: budget for inspection and license fees, landlord insurance, and reserves for repairs and vacancy. Rental income is taxable, and many ordinary expenses are deductible; speak with a CPA about your situation.
- Cash flow planning: layer in permit fees, utility upgrades, HOA approvals, and timeline risk. Give yourself a cushion in case a permit or inspection takes longer than expected.
Central Park neighborhood realities
Central Park is Denver’s largest planned neighborhood with multiple districts, strong owner occupancy, and the RTD A Line at Central Park Station. Transit access and nearby retail support steady housing demand, which benefits both long‑term rentals and permitted primary‑residence STRs. HOA governance is common here, so alignment with CC&Rs often determines what is possible on your lot.
- Neighborhood overview: Central Park, Denver
Step‑by‑step checklist
- Verify your lot’s ADU eligibility, setbacks, and height standards on the city’s ADU page.
- Pull your HOA or metro district CC&Rs and confirm rules on rentals, STRs, and exterior changes.
- If renting long‑term, schedule a residential rental license inspection and apply for the license.
- If operating an STR, prepare primary‑residence documents, apply for the STR license, set up tax accounts, and secure required insurance.
- Get lender pre‑approval for the exact path you plan, such as owner‑occupied 2–4 units or ADU construction financing.
- Build a realistic budget for plans, permits, utility upgrades, contractor bids, and a time buffer for reviews.
- Line up your team early, including a licensed contractor familiar with Denver ADUs and a CPA for tax planning.
When house hacking makes sense
House hacking in Central Park can work well if your HOA allows it, your financing is solid, and you plan for license and permit timelines. Buying a legal duplex or adding an ADU can create durable cash flow with fewer surprises than relying on STR demand. If your HOA bans STRs or exterior structures, room rentals or a 2–4 unit purchase may be the better fit.
Ready to map your options block by block in Central Park? Reach out to Kendall Boyd and Sara Wilhelm for neighborhood‑first guidance, clear next steps, and a plan that fits your goals.
FAQs
Can you build a detached ADU in Central Park under Denver’s new rules?
- Yes, Denver broadly allows ADUs after a 2024 citywide update, but you must follow ADU permit standards and any HOA approvals that apply in your sub‑neighborhood.
What license do you need to rent a basement apartment long‑term in Central Park?
- You need a Denver residential rental license for any rental of 30 days or longer, which requires a third‑party inspection before approval.
Can you legally run an Airbnb in your Central Park primary residence?
- Yes, if it is your primary residence and you obtain a Denver STR license, carry required liability insurance, register for taxes, and include your license number in all listings.
How much does it cost to build an ADU in Denver right now?
- Local reporting shows modest ADUs often range about $200,000 to $400,000 or more depending on size and complexity, plus permit and design costs.
Do Central Park HOAs allow rentals or ADUs?
- It depends on the specific HOA or metro district; many have covenants that limit STRs or control exterior changes, so review your CC&Rs before you plan.
