Investors who are thinking about buying properties in the Colorado Springs market or evaluating their current rental portfolio will need to understand the local market. Home values are rising and the inventory on the sales market is low, but what does that mean for your rental properties?
Investing in Colorado Springs Rental Properties
The average single-family home is worth more than $400,000 in Colorado Springs right now. While the higher prices on the sales market aren’t going to help you buy up an entire portfolio with plans to flip the homes and make a fortune, these do make excellent investments if you’re willing to be patient and hold your investment for several years.
The increases pricing we’re seeing and the high demand for good homes means it’s a good idea to invest in Colorado Springs real estate that you’re willing to hold for a while.
Evaluating Median Rental Prices
For the last couple of years, the median rent that Colorado Springs rental property owners have been able to expect is at or above $1,500. This will ease any of the higher acquisition costs that come with rising property values.
While the last year has brought some uncertainty to rental markets and local economies everywhere, Colorado Springs is doing okay. Rents have not dipped dramatically, and the vacancy rate has not climbed the way it has in larger cities like San Francisco and New York. Investors can still expect to find well-qualified, long-term tenants to rent their homes, whether it’s a single-family home or a multi-family building.
Location Matters in Rental Real Estate
When you’re analyzing any real estate market, you need to consider location. Colorado Springs isn’t a huge market, but it’s a city that’s been attracting new residents for nearly a decade. The population is steadily growing, and this is the second most populous city in Colorado after Denver. We’ve attracted a lot of millennial tenants as well as professionals and families fleeing larger cities in favor of more space and a higher quality of life.
The value of a rental property’s location of a rental property involves more than just its population. Renters in Colorado Springs are looking for proximity to schools, parks, public transportation, and recreation. When you’re considering a specific property to acquire, take a look at neighborhood amenities and whether it’s close to grocery stores, hospitals, and dining.
Demographics in the Colorado Springs Rental Market
Another important factor in evaluating a rental market is demographics. Who is moving into the area? Who is renting instead of buying? We’ve already talked about the millennial population, and how they are choosing markets like Colorado Springs over large cities. They’re also more likely to rent a home and are less interested in buying. There are also active adults and retirees who are looking for a low-maintenance lifestyle after years of homeownership. They will also be a strong part of the Colorado Springs tenant pool.
These are just a few of things to look at while you’re evaluating the Colorado Springs rental market. We enjoy working with investors to help them make good decisions. When you have questions about rental homes here, contact our team at Muldoon Associates.