Phoenix / Colorado Springs / Reno - Which should I invest in!?

9 Replies

Hey everyone,

Looking to choose a market to start investing in Homes, Multi-Family, and Apartments. I live in CA and have narrowed it down to these 3:

1) Phoenix MSA

2) Colorado Springs

3) Reno/Sparks

If anyone has any advice, opinions, or connections in these markets please let me know; or simply just let me know which one you would choose and why.

Appreciate all input, thanks!!


Carly 

Hi @Carly Baum

I cannot speak on the Colorado Springs or Reno/Sparks so anything I say cannot really be juxtaposed against those two areas and as a Realtor here, I can say that Phoenix has endured a very strong recovery from the housing crash. Phoenix has seen a good rental market in single family homes and apartments, but the stock of small multifamily (2-4 units) is decades old and there are not a lot of them here. The ones available tend to be older (built in the 50's and 60's) and mainly centralized to the downtown area, although they are available throughout most of the city (Mesa, Glendale, North Phoenix). 

Vacancy is roughly 94%-95% depending on the source of the information, but rent increases and population growth make Phoenix a pretty strong rental market with renters making up roughly 40% of the population. If you'd like to speak more about Phoenix, feel free to PM me about anything else.

Comparing these three markets without more information about the types of investment you want to make (asset class, cash flow, COC required, Cap rate, etc.) is a futile exercise. The entire front range from Fort Collins to Colorado Springs is being inundated with out-of-state investors seeking higher returns through value-add investments. Guess what? The inbound migration that has been a constant for the last 8-years has many new residents seeking the exact same thing.

Be as specific as you can about what you are looking for and we will give you our assessment of availability

Hey Carly- I actually service Colorado Springs (and Denver), and have written a few BP articles about why I like CS. You can find them here and here. I can't speak to those other areas, but I do like CS a lot for it's appreciation, proximity to Denver (and Denver overflow), and diversity of industry. PM me if you'd like to discuss more. Thanks! 

Phoenix has been a very popular destination for Cali investors! We have a lot of investors, but we also have a TON of job growth, so the market growth has been sustainable. Appreciation is reliable and steady. Happy to answer any questions you have about the area!

@Carly Baum

When investing out of state, you have several considerations:

1) Economic Trends of the Local Market (Job Growth, Population Growth, Housing Market, Migration)

2) Having some familiarity with the area or friends/family who live there

3) Likelihood of Travel to the Market

Phoenix has #1 above covered in spades. Tons of California migration (residents and OOS investors), but also lots coming down from colder climates too. Job growth, population growth, you name it.

Factors #2 and #3 may sway you one way or the other, as no one is likely to be an expert on all three markets to be able to advise you properly from an economic standpoint. 

I invest in CO but stay out of COS. The ROI is better south of COS. However the Clientele is uglier and more addicted. Still in COS you have the Army and Air Force groups so each can get a little rowdy. Also in COS you do not have access to the same level of Property Management groups as you would in say Phoenix. For me that would be huge.