CO markets to get into now?

Question

I currently live in Boston, MA, but will be moving to Colorado next summer. I have saved up a good amount of funds and wanted to know if there are any hot markets I should be looking out for. Multifamily properties interest me because I'll be able to house hack, but I'd like to add some single family to my portfolio is well. Looking forward to hear what y'all have in mind!

Teri Feeney Styers · Answer

I always like to point out on these threads that there is a whole other side of the Rockies that gets somewhat ignored... beautiful places and better weather! Also less expensive markets... vacancy rate in Grand Junction? Less than 3%... rentals are very much needed.

Steve K. · Answer

@Justin Makkay Boulder is by far the best place in Colorado (ducks and runs away). I wrote way too much for you already in your other thread about Boulder so I think you get the gist of it. If you’re looking for where to land and buy a primary to house hack, it really depends on a few key things that are specific to you: job location, budget, family/schools if applicable, preferences as far as being walking distance to restaurants vs. at the end of a long dirt road with acreage, plains or mountains, hobbies, lifestyle, skiing/snowboarding, rivers, climbing, mountain biking, fishing, hunting, single or married, spirituality (looking at you Crestone) etc. There are so many options as Colorado is a big state. Most people living in the front range are here because of jobs and business opportunities, or to be close to a large urban center, international airport etc. while those that move to Colorado for reasons more lifestyle-based and aren’t stuck in the front range due to their career or family or whatever usually prefer to live in the less crowded parts (crested butte, steamboat, Durango, western slope are all highly desirable among many others). So it really depends on you and your situation. If you're looking to house hack and live off dividends and be a ski bum and money is no object, you'll fit right in in a place like Telluride. If you'll be needing a job, front range has the most jobs. There are good and bad deals to be had in every Colorado town. The rental markets are more robust in the bigger towns like Denver, Boulder, C Springs, Fort Collins etc. so it will be easier to find housemates in those places to fill your house hack, however most of the state is booming aside from the eastern plains and a few other small rural areas like Craig, Del Norte, Walsenburg, and Trinidad (sorry Craig, Del Norte Walsenburg and Trinidad), so you should be able to find housemates easily almost anywhere as long as you avoid the few places with declining populations. Boulder is definitely the best though, anyone that disagrees is just bitter because they’ve been priced out (covers head and sprints away). Truth be told I have a bit of a love/hate thing with Boulder and always have, but everywhere has its pros and cons. Strictly speaking about big gains through buy and hold real estate, Boulder is a good place for that (if you can get over the barrier to entry).

Chris Lopez · Answer

@Justin Makkay There are many good spots all over Denver metro for house hacking, but limited options with multifamily. MF's are in low inventory, but they are starting to build some. Don't get fixated on multis for a house hack. In the grand scheme, buying a multi or a single family won't make a difference in the long term perspective of building wealth. Out of the last 20 or so house hacks that we've closed, only two have been multis.

Don't put more down to make the numbers work! That is bad advice. The power of HH is that you can put so little down. If you need to make the numbers work better, than look at prepaying PMI (for non FHA loans) or buying your rate down. After running the numbers with dozens of clients, I've had two more down than 3.5% or 5%.

Grace Wang · Answer

@Justin Makkay I'm currently looking in between Boulder & Denver for my first house hack (single family). I've lived here for approx 2 years, and am looking to go a little NW in areas such as Westminster and Broomfield. Rent by the room/AirBnb outside of Denver County, and you can 100% make it work. Would also recommend subscribing to BusinessDen...it may give you a good idea of commercial development before you move here. Feel free to connect if you want to talk more!

Jake Sklanka · Answer

Howdy @Justin Makkay,

I made the move to Colorado from New England in 2007 and have been loving every moment! Good choice.

Don't forget Colorado's playground when searching for locations to post up. Summit County (Breckenridge, Frisco, Keystone, Dillon, Silverthorne), Vail, Steamboat, Crested Butte, etc. are where a lot of the Front Range folks spends their weekends, as well as millions of out of state and international travelers every year. Short term rentals have done very well for us there, especially when living in one bedroom and STR the second. @James Carlson is the pro on BP for Airbnb techniques!

@Chris Lopez has an outstanding podcast called the Denver Real Estate Investing Podcast, which has loads of excellent  information to supplement all of the great content on BiggerPockets!

@Steve K. Nice post! Colorado is where it's at and that's no secret, but I feel you on the duck and cover! haha My wife and I just moved to Boulder and bought a house hack, rent by the room, in Gunbarrel. We'd be living for free if we rented out the 4th bedroom rather than having a home office. Can you link to the other post about Boulder? Thanks.

Good luck, Justin!

James Carlson · Answer

@Justin Makkay

So is the city in which you land here in Colorado dictated by the market? If so, Pueblo seems like a good play but I think most people of a certain age are not going to love living there when you've got cooler cities north.

I tell our clients to make their first investment their primary residence. If you're moving to Denver or Colorado Springs, I'd buy there. Yes, they're both hot, but you've got to live somewhere, and I think you should own that place. Plus, you can find a place that still offsets your mortgage through house-hacking or actually cash flows.

I wish you luck. Cheers!

Ryan Riches · Answer

Welcome to Colorado Andrew! The entire front range (from Fort Collins down to Colorado Springs) is pretty hot right now. There are a lot of people that are moving down to Colorado Springs from Denver because it is a more affordable market. Multifamily units are in high demand and low supply across these cities as well. I'll second what @Justin Makkay mentioned. I purchased a single family house with a walkout basement and have house hacked with Airbnb! This has been a great strategy for us to cashflow the house that we are living in. Make sure you are up to speed on the STR regulations of the city you are looking into though.

Andrew Vascassenno · Answer

@Justin Makkay The entire Denver metro area and Colorado Springs, even been hearing a lot of people starting to look as south as Pueblo for deals. With house hacking, you can mostly make the numbers work if you put enough down. I would start looking now in different areas of Denver just to see what’s out there in terms of multi family and maybe an area you’d like to live in. Depending on where you work, the Springs could be a good option too if you don’t mind a decent commute up to Denver.

Andrew Vascassenno · Answer

Great points @Chris Lopez!

@Daniel Dixon coming from AZ (pretty sure zero basements) to CO, there are a good amount of basements to potentially house hack. Plenty of options out there for an up/down duplex (although these are pretty pricey). Just need to do your due diligence in regards to the zoning, conforming/legal rooms in the basement, and the potential cost to convert a basement to a separate livable space if you’re going that route, among others.

Bryan Cork · Answer

@Justin Makkay

Colorado Springs does not have a large volume of traditional Multifamily properties like other parts of the country. But if I were in your shoes and looking to house hack, I would find a suitable rancher with a walkout basement that you can then wall off the units and create a duplex feel. My friend @Joshua Roberts is a beast at this strategy. If you are patient and buy right, this can be a HUGE equity play.

CO markets to get into now?

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