The Colorado housing market may be one of the best in the country for investing in real estate. Colorado landed the following rankings:
- 3rd best state for low property taxes
- 8th best state for high traditional rental income
- 8th best state for high Airbnb rental income
In Colorado, where do real estate investors earn the highest returns a rental property? What are the best cities to invest in a rental property in?
Is now a good time to buy an investment property?
Colorado has been a great place to buy investment properties for years now, there’s been a large influx of people moving to Colorado, especially now during COVID, as more people are able to work from home. So they’re moving to places that they’ve always wanted to live, such as Colorado, it’s created a large demand for properties in Colorado, meaning our rental market here is doing great.
What cities have the best real estate market as a whole?
The Colorado Housing Market is super strong, and it’s a very desirable area to live. However, in most populated areas with lots of diverse properties, and the most popular places to live, would be Aurora, or Fort Collins, Denver and Colorado Springs.
Top 5 places to invest in Colorado.
Our list below shows both traditional and Airbnb data for the top 5 Colorado real estate investment cities. However, it is important to note that some of these cities may not recognize Airbnb as a legal real-estate investment method.
Non-owner occupied Airbnb rentals are not permitted in Denver. Airbnb hosts must live in the rental property as a primary residence in order to rent it out on Airbnb. Also, non-owner occupied rentals cannot operate in residential zones in the Colorado Springs real estate market.
#1 Aurora Housing Market
- Median Property Price: $375,503
- Price per Square Foot: $221
- Price to Rent Ratio: 16
- Traditional Rental Income: $1,899
- Traditional Cash on Cash Return: 1.5%
- Average Airbnb Daily Rate: $116
Aurora’s real estate market has appreciated by 99% since the first quarter of 2000, at an annualized rate of 3.45%. Residential rent now accounts for 41% of the sales in the city, meaning there is a strong demand for traditional rental properties.
#2. Denver Housing Market
- Median Property Price: $534,888
- Price per Square Foot: $343
- Price to Rent Ratio: 23
- Traditional Rental Income: $1,959
- Traditional Cash on Cash Return: 1.5%
- Average Airbnb Daily Rate: $152
Colorado’s Denver housing market has seen a significant increase in value of 133% since Q1 2000. With an annual average of 4.26%, Denver is one of the top cities for real estate appreciation on this list. The percentage of renters in the Denver market is high – fifty percent.
#3. Colorado Springs Housing Market
- Median Property Price: $446,256
- Price per Square Foot: $185
- Price to Rent Ratio: 24
- Traditional Rental Income: $1,557
- Traditional Cash on Cash Return: 1.4%
- Average Airbnb Daily Rate: $137
Real estate investors looking for a Colorado investment property will find competition in Colorado Springs right now. Colorado Springs real estate appreciation stands at 92% since the number one year of 2000. 41% of the population lives in a rental property.
#4. Longmont Housing Market
- Median Property Price: $636,448
- Price per Square Foot: $257
- Price to Rent Ratio: 26
- Traditional Rental Income: $2,041
- Traditional Cash on Cash Return: 1.3%
- Average Airbnb Daily Rate: $97
It is the most expensive on this list, but it is a fair price for buyers in a buyer’s market. Home values have grown by 90% in Longmont since Q1 2000 and the real estate appreciation rate averages 3.23% annually. The renter population stands at 39%.
#5. Fort Collins Housing Market
- Median Property Price: $504,339
- Price per Square Foot: $237
- Price to Rent Ratio: 23
- Traditional Rental Income: $1,865
- Traditional Cash on Cash Return: 1.2%
- Average Airbnb Daily Rate: $152
As of 2020, housing values have increased by 115%, on average, over Fort Collins’s own history, rising at a rate of 3.86% over the last decade. Fort Collins has a high proportion of renters.
How to Buy an Investment Property in Colorado
What cities have the best real estate market?
¿Qué ciudades tienen el mejor mercado inmobiliario?
El mercado de Colorado es uno de los mercados inmobiliarios más populares y competitivos en toda la nación. Algunas de las mejores ciudades para invertir en un inmueble en Colorado son Aurora, Fort Collins, Denver y Colorado Springs.
When purchasing an investment property in Colorado you’ll of course first want to make sure that your financing is an order. Once you begin shopping, make sure that you’re in contact with the property manager so they can give you accurate rental estimates and put together a plan of action for renting and managing the property.
Is purchasing a rental property in Colorado a good investment?
Absolutely. The Colorado Housing Market is super strong and Colorado is one of the most desirable areas to live. So many people move here all the time so it’s a great opportunity to have a rental property.
What next? How do you invest in real estate in Colorado?
Once you find the best neighborhood to invest in real estate, you can easily find high-return investment properties using our Real Estate Professional, Jason Cassidy. Colorado Realty and Property Management will then professionally pace a tenant and manage your investment for you. Contact us today for a quote.
