1031 Exchanges & Steamboat Long-Term Rental Investments

Short-term nightly rentals aren't the only way to put a Steamboat investment property to work. From homes across town to newly built townhomes a short walk from the slopes, properties here can also be leased month-to-month, seasonally, or annually. For investors weighing a 1031 exchange, a long-term lease can qualify just as a nightly rental can.

We recently spotlighted nightly rental and commercial properties suited to a 1031 exchange. This article turns to the third path: long-term rentals, including homes in Steamboat's Yellow Zone, where short-term rental licenses are capped. Our 1031 Exchange Guide covers the deadlines, identification rules, and Colorado closing requirements in full.

Can a long-term rental qualify for a 1031 exchange?

Yes. A home leased to long-term tenants can serve as replacement property in a 1031 exchange, as long as it’s held for investment or business use. The exchange allows an owner to sell one investment property and buy another while deferring tax on the gain, with 45 calendar days to identify a replacement and 180 days to close through a qualified intermediary. Zoning determines which rental model a Steamboat property can use, not whether it can be part of an exchange.

The same logic works in reverse for owners. Selling a nightly rental and exchanging into a long-term lease is one way to change how a property earns, with less day-to-day management, while deferring tax on the gain.

What does the Yellow Zone mean for long-term rentals?

The Yellow Zone, Zone B of the city's Short-Term Rental Overlay, caps short-term rental licenses across six subzones. When licenses in a subzone fall below the cap, the city holds a lottery for owners who have requested one. The cap applies only to short-term rentals, which the city defines as stays of less than 30 consecutive days when the owner does not live on the property. A lease of 30 days or longer falls outside that definition, so a Yellow Zone home can be leased for a month-long ski season stay or a year-round tenancy without a short-term rental license. Our Short-Term Rental Guide covers the Green, Yellow, and Red Zones in detail.

Homes for Sale Suited to Long-Term Leasing

1462 Clubhouse Drive Less than a mile from Steamboat Ski Area and on the free city bus route, this duplex residence spans more than 4,600 square feet with four bedrooms, two queen-over-queen bunks, and two primary suites. The great room's double-height ceilings and gas fireplace open to a chef's kitchen and a covered deck with a hot tub, private yard, and ski area views. A lower-level media and game room with wet bar and full bath, A/C in the primary suites and main living areas, and a heated two-car garage with gear storage give long-term tenants or extended-stay guests room to settle in. Represented by Kenny Reisman. View Listing →

1625 Natches Way  On a third of an acre with views of the ski area in one direction and Emerald Mountain, Rolling Stone Golf Course, and Sleeping Giant in the other, this log home pairs a two-bedroom-plus-den main residence with a separate one-bedroom lofted guest house. The second structure, connected by a covered walkway, has its own full kitchen, living area, stone fireplace, laundry, and dual decks, suited to a guest house or long-term rental. Dual driveways with separate entrances, a two-car garage, and an EV charger complete a property set up for two distinct living spaces. Represented by Chris Paoli. View Listing →

795 Twilight Lane  This newly built mountain-modern home in Barn Village spans 4,839 square feet with five bedrooms, including a custom bunk room with an attached guest or au pair suite, and views of the ski area, Emerald Mountain, and More Barn. Two-hundred-year-old barnwood siding, quartzite surfaces, and two stone fireplaces define the interiors, and WarmBoard radiant heat, central air, a snowmelt driveway, and Moen smart water shutoff support year-round living. The home offers a fenced yard with low-maintenance landscaping and low HOA dues, located adjacent to protected open space, steps from Barn Village's pool, hot tub, fitness center, and trails, and moments from skiing, trails, shopping, and dining. View Listing →

1375 Walton Creek Road 7  In the Walton Creek community, this updated two-bedroom, two-bath condo sits steps from a bus stop and about a 10-minute walk from the gondola. The ground-level residence offers no-stairs access and a walkout patio, with a fully renovated kitchen, refreshed bathrooms, new flooring, in-unit laundry, and LED lighting. Community amenities include a pool, hot tub, open space, oversized storage, and two parking spaces, and low HOA dues cover the majority of monthly expenses. Represented by Justin Read. View Listing →

3402 Apres Ski Way  On a quiet cul-de-sac less than a mile from Steamboat Ski Area, this refreshed creekside home sits near the Bear Creek Trailhead. A wood-burning stone fireplace and picture window framing ski area views anchor the great room, while a new creekside deck extends the living space outdoors. The lower level holds two bedrooms and a full bath, and an attached lock-off studio with its own bath adds flexibility for guests or a separate tenant. The property suits a full-time home, mountain retreat, or long-term rental, with the option of a future custom build. Represented by Lee Calihan and Chris Paoli. View Listing →

The Vantage at Village Drive These newly completed townhomes offer three-bedroom floor plans and lock-and-leave living a short walk from the slopes. Designed by Bill Rangitsch of Steamboat Architectural and built by Colorado Home Solutions, each residence includes a private rooftop terrace, mountain views, a heated garage, and additional covered snowmelt parking. Buyers who close by October 29 save $100,000 through a pre-ski season incentive, and the model is open at 2936 Village Drive 1. Represented by Justin Read and Chris Paoli. View Listings →

The Terrain at Walton Creek Terrain is a collection of eight new townhomes under construction moments from Steamboat Ski Area, with completion scheduled for Winter 2026/2027. Two- to three-bedroom-plus-den floor plans center on open living, expansive covered decks oriented toward valley and mountain views, and two-car garages with room for gear (in most residences). Buyers who purchase before October 31 receive a turnkey furniture, housewares, and upgrade package valued at $175,000. Represented by Jessica Stanford and Chris Paoli. View Listing →

Closing

Nightly rentals, commercial space, and long-term leases can each serve as replacement property in a Steamboat 1031 exchange. Whether you're buying with exchange proceeds or selling to reposition your investment, our 1031 Exchange Guide walks through the rules, and our team can help confirm zoning, HOA leasing rules, and timing for any property. Reach out to The Agency Steamboat Springs at [email protected].

This post is for general information only and does not constitute tax, legal, or financial advice. Consult a CPA, tax attorney, and qualified intermediary before structuring an exchange.