Colorado Springs is a real estate market that’s enjoying quite a bit of growth. As with any investment, there are rewards and challenges to buying property here, but there’s a sustained interest in buying and renting out homes because there’s such a high demand of people who are looking for those homes.
The population is spiking in our area. There was a 15 percent increase from 2010 to 2020, and there are still more and more people moving into the area. We can credit our strong local economy, our abundance of natural resources and recreational opportunities, and our high quality of life with this migration.
If you’re an investor with a home for rent, you’re in a pretty strong position. Plenty of well-qualified renters are looking for homes in desirable neighborhoods.
If you’re not currently an investor here, maybe you’ve considered becoming one.
It’s a good idea. There’s certainly money to be made and a strong community that you can join when you decide you want to own some property in our market. A lot is happening in Colorado Springs. If you’re going to invest here, make sure you have a firm foundation on what you’re looking for and why.
As professional property managers in Colorado Springs with a lot of experience in the local real estate market, we thought it would be a good idea to put together a 2024 real estate investing guide for anyone who is thinking about an investment property in this area. We want to help you decide if it’s the right time and the right place for you.
It’s a general look at the market and the opportunities here, so don’t hesitate to reach out for a more specific and personal analysis.
Colorado Springs Real Estate and Rentals
What do you need to know about Colorado Springs and its market before you invest here?
As any good investor would, you have to do your due diligence. Get to know the tenant population, the demographics. Think about the weather and the seasons because snow and ice do have an impact on property deterioration and strong leasing seasons.
Here are some of the things you really want to consider before you decide to invest. These things also explain why the local market is getting so much attention from local investors as well as those from all over the country.
- Economic Growth
Colorado Springs has seen steady economic growth over the past decade. The city is home to a diverse range of industries, from defense and aerospace to tech startups and healthcare. This economic diversity provides a stable foundation, reducing the risk associated with relying on a single industry for economic health. The number of companies hiring in our area is only growing, and there’s also a strong entrepreneurial spirit, attracting startups and sole proprietors.
- Quality of Life
This is Colorado, and we can tell you that our state has some of the most stunning views. With its incredible natural scenery, impressive mountain peaks, abundant outdoor activities, and a strong sense of community, Colorado Springs appeals to a wide range of people. The city consistently ranks high for quality of life, making it an attractive option for potential renters and home buyers alike. There will always be tenants looking for homes, and if you have one available, there is money to be made.
- Population Growth
Population growth is a key indicator for real estate investment, and Colorado Springs does not disappoint. The city has experienced consistent population increases, driven by both job opportunities and its appealing lifestyle. More people mean more demand for housing, which is a boon for real estate investors. All demographics are represented here, from students to retirees.
Before You Buy: Get to Know Your Investment Goals
Setting investment goals is an important first step in investing in Colorado Springs, whether you’re buying property for the first time or expanding on a growing portfolio.
You know you want to invest here, but do you know why you want to invest?
Set some serious investment goals and put them in writing. To make successful real estate investments, you need to know why you’re investing and what you’re hoping to accomplish. Make a one-year plan, a five-year plan, and a long term plan that even outlines how you might get out of the investment down the road. Having an exit strategy before you even begin might seem silly, but it’s a good idea.
These investment goals should drive every decision you make. They will keep you on track as you explore the properties that are available in this market.
Market Trends in 2024
We talked about some of the reasons that Colorado Springs might make a good place for your next investment. We underscored the importance of being comfortable with your own investment goals. Now, let’s take a look at how the market might work for you, as a real estate investor.
- Housing Market Stability
Despite economic fluctuations in real estate markets elsewhere, the Colorado Springs housing market has shown remarkable stability. In 2024, this trend is expected to continue, making it a resilient option for those looking to invest in real estate. There’s a strong demand among both buyers and renters.
- Increasing Property Values
Property values in Colorado Springs have been moving upwards pretty steadily. While this means higher entry costs, it also suggests strong potential for appreciation. Investors who get in now could see significant returns in the coming years. While the prices have gone up and stayed up, this is still a significantly more accessible real estate market than those in places such as California or along the east coast. We are also hoping that interest rates will begin to come down as the year closes out, making mortgages and loans more affordable.
- Rental Market
The rental market in Colorado Springs is only getting stronger, driven by a mix of young professionals, military personnel, and families. High occupancy rates and stable rental prices make it an attractive option for those looking to generate rental income. You can expect both a healthy cash flow and a lot of long term appreciation.
Types of Investment Opportunities
What should you be looking for when you invest in Colorado Springs? Again, it will largely depend on your investment goals, your financial situation, and your existing portfolio. You can buy a single-family home if you’re looking for a long-term, stable tenant and higher rental values. These properties also appreciate better and appeal to a broad range of tenants.
Multi-family properties are also a good idea, especially if you want to reduce your vacancy risk and enjoy multiple income streams from a single investment. There are a number of neighborhoods in Colorado Springs where multi-family properties are in high demand.
If you’re looking for ways to diversify a residential portfolio, you might want to consider a short-term or vacation rental in Colorado Springs. You could also explore the possibility of investing in commercial real estate.
Is Colorado Springs Right for You?
You have a sense of the market and the properties that are available here. So, is the Colorado Springs real estate market where you want to spend some money?
We’ve put together a pro and con list that might help you decide:
Pros
- Economic Stability. There’s a diverse economy, which reduces risk.
- Quality of Life. The high quality of life attracts a steady stream of potential renters and buyers.
- Population Growth. Consistent population increases drive demand for housing.
- Market Stability. A stable housing market offers low risk.
Cons
- Rising Property Prices. You’ll encounter higher entry costs, which can be a barrier.
- Competitive Market. Increased interest in the area means more competition for desirable properties.
- Property Taxes. As property values rise, property taxes may also increase.
If you’re still thinking about it and you’re ready to get started, begin by researching the different neighborhoods in Colorado Springs that appeal to you as an investor. You’ll find that each area has its unique characteristics and potential for investment returns.
Ensure you have a solid financial plan. Understand your budget, financing options, and expected returns on investment.
Finally and most importantly, partner with local property management experts and real estate agents who understand the Colorado Springs market. Our expertise can guide you through the complexities of the local real estate landscape.
Investing in Colorado Springs real estate in 2024 presents a promising opportunity for a number of investors who are feeling like this market checks off all their boxes. Be prepared for the challenges, and get to know the local communities as well as the competition.
As Colorado Springs property managers, we can give you an idea of what kinds of rents you’ll earn, how much it may cost to maintain your property, and what you can do to maximize your income.
Contact us at Muldoon Associates. We look forward to discussing your investment goals and looking for ways in which Colorado Springs rental homes can help you meet them.
