CO Investment properties- what's your opinion?
Real Estate Agent · Destin, FL · Member since 2019 · 116 posts · 111 votes
CO Investment properties- what's your opinion?
Most Popular Reply
Ben RhodinBusiness Member
Realtor · Denver, CO · Member since 2020 · 338 posts · 331 votesHey @Jossalyn Wallace! Colorado has tons of opportunity still, and we have so many other facets other than just cash flow (which I think people get caught up in a lot) to work with, and our market is notoriously stable as well. I still have clients buying here in the Denver Metro, Boulder County, and into the foothills and many are able to achieve 10%+ COC returns. At the end of the day, it all comes down to your goals and investing strategy. I'll give you my answers for your questions down below!
1. Would or wouldn't you invest here? And which investment style? ( ie BRRRR, flip, LTR, STR)
I am actively investing in the Denver market, and have numerous clients doing so as well. Long-term rentals are mostly out, as the price-to-rent ratio is not favorable here. So unless you want to just do appreciation play, I would go creative. Most of my investing are in the MTR (Medium Term Rental) space due to the large medical field in the Denver Area, and numerous expansion projects going on. This strategy is fantastic as you are not tied to STR regulations which are notorious in Colorado, and can be challenging to navigate. They are also easier to operate and produce solid returns. STRs do work around Denver, but you just need to navigate the regulations and find ways to differentiate your property as we do have high saturation. Luckily for either of these strategies, we have so many people that want to come to colorado that our demand for STRs and MTRs is very high year-round.
2. What are your favorite locations and why?
Personally, I stick with the Denver Metro and into some of the foothills just outside Denver. Denver continues to have massive growth, and diverse employment, and leisure activities that we rarely see dips here. and the foothills provide a solid STR base for investors as well.
2. Do you have a team you love (especially if you're doing things long distance) and do you self-manage/have a refined system?
I mean, Im a bit biased, but yes I do like my team (it's me by the way). and I have long-distance investments out of colorado, but I am currently 1031ing those back into Colorado, as I see a better opportunity here. I currently Self manage all my units (LTRs, MTRs, and STRs), and have all the systems in place to make it easy.
3. Any other info that you find helpful with respect to the area or long-distance investing?
I help numerous out of state clients each year close on properties in Colorado, and it really comes down to the team on the ground. Find someone that really knows the area, and will work with you to develop your goals and strategy. If that clicks and they are on the same page as you long distance can be as easy as having one down the street. The gripes with Long distance come when you don't know who to call for an issue that arose at your property, and you can't physically be there.
19 Replies
Hi Jossalyn,
I have two LTR's in CO and can safely tell you that its not fun trying to buy here. Both home I used to live in, which were not turn-key. This is the only way I was able to acquire them since its been so competitive. The market has slowed down quite a bit, however prices still seem a bit high. My favorite area so far is in Colorado Springs only because they tend to help out landlords vs Denver where rent control is a heated topic that rears its ugly head from time to time. I dont have a team anymore and would caution which one you end up using. I have had really bad luck in the past with a few locally run management teams.
Best of luck!
- Member since 2021 · 168 posts · 141 votes3y
Hi, born and raised in Denver and still live here. I love the mountains and visit often but i do not invest in Colorado. It's definitely hard to make the numbers work unless you're adding a lot of value in areas such as Arvada, unincorporated Adams County, or Northglenn. I know some people that do okay, but if for some reason the STR restrictions tighten more, they'd lose money as a LTR. I'm happy to help however i can.
- Real Estate Agent · Denver, CO · Member since 2022 · 9 posts · 5 votes3y
Hey Jossalyn,
Lately, the buzz at the Meetups I have been attending have been mostly about flips and STR. It can be a competitive market in and around the Denver area, but there is still opportunity. I would suggest joining some of the local Facebook groups to get an idea of what people are doing.
Feel free to reach out if you have any questions, would love to help!
- Real Estate Agent · Colorado Springs, CO · Member since 2021 · 279 posts · 121 votes3y
Hey @Jossalyn Wallace,
You can definitely make it work out here in the front range and into the mountains, but you will be facing a lot of competition and high prices as the natural landscape prevents a lot of new builds in the most scenic and popular areas. If you have the ability to play in this market you will experience some tremendous appreciation, but cash flow will virtually be impossible unless you implement a mid-term or short term strategy. In addition to this, there have been many laws passed in the mountain communities to limit the amount of STR's in the area. (I'm sure the large hotel presence has something to do with it!)
If you want to explore some options in the Colorado Springs area or in the mountains please feel free to reach out!
I wish you the best in your real estate journey! Take Care,
- Real Estate Agent · Grand Junction, CO · Member since 2015 · 1k+ posts · 736 votes3y
@Jossalyn Wallace what the others have failed to point out is that there is a whole other 3/4 of the state of Colorado that isn't the Front Range corridor... you need to look on the west side of the Rockies or the plains where there are small towns that also need decent rentals and have cheaper real estate.
- 3yRyan MoyerBusiness MemberProperty Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 993 posts · 1k+ votes
The biggest problem with ski resort areas, especially western ski resort areas, is that there is limited supply and too many buyers that want to buy a home for themselves, and are willing to pay prices higher than would make sense as an investment.
Somewhere like Gatlinburg the prices are driven by investors. Everyone buying there is buying to make money on STRs, so prices are mostly capped at the point where they would stop making sense as an investment.
But out in these western ski markets there are tons of people that just really want a house there for themselves, and they are willing to pay $4M for a property that only does $100k gross STR revenue that doesn't even cover the mortgage because for them, the STR revenue is just a bonus.
Cosmic Vacations4.9172 Reviews - Real Estate Agent · Destin, FL · Member since 2019 · 116 posts · 111 votes3y
Quote from @Ryan Moyer:
The biggest problem with ski resort areas, especially western ski resort areas, is that there is limited supply and too many buyers that want to buy a home for themselves, and are willing to pay prices higher than would make sense as an investment.
Somewhere like Gatlinburg the prices are driven by investors. Everyone buying there is buying to make money on STRs, so prices are mostly capped at the point where they would stop making sense as an investment.
But out in these western ski markets there are tons of people that just really want a house there for themselves, and they are willing to pay $4M for a property that only does $100k gross STR revenue that doesn't even cover the mortgage because for them, the STR revenue is just a bonus.
I deal with that in my local market on occasion as well so totally understand.
- Real Estate Agent · Destin, FL · Member since 2019 · 116 posts · 111 votes3y
Quote from @Teri Feeney Styers:
@Jossalyn Wallace what the others have failed to point out is that there is a whole other 3/4 of the state of Colorado that isn't the Front Range corridor... you need to look on the west side of the Rockies or the plains where there are small towns that also need decent rentals and have cheaper real estate.
Any towns in particular that you feel are worth while to check out? Keep in mind I'd like to be able to use it when I am there.
- Real Estate Agent · Grand Junction, CO · Member since 2015 · 1k+ posts · 736 votes3y
@Jossalyn Wallace so you are looking for short term rental as opposed to long term? What does "use it" mean to you and what do you want to do while here?
- 3yBen RhodinBusiness MemberRealtor · Denver, CO · Member since 2020 · 338 posts · 331 votes
Hey @Jossalyn Wallace! Colorado has tons of opportunity still, and we have so many other facets other than just cash flow (which I think people get caught up in a lot) to work with, and our market is notoriously stable as well. I still have clients buying here in the Denver Metro, Boulder County, and into the foothills and many are able to achieve 10%+ COC returns. At the end of the day, it all comes down to your goals and investing strategy. I'll give you my answers for your questions down below!
1. Would or wouldn't you invest here? And which investment style? ( ie BRRRR, flip, LTR, STR)
I am actively investing in the Denver market, and have numerous clients doing so as well. Long-term rentals are mostly out, as the price-to-rent ratio is not favorable here. So unless you want to just do appreciation play, I would go creative. Most of my investing are in the MTR (Medium Term Rental) space due to the large medical field in the Denver Area, and numerous expansion projects going on. This strategy is fantastic as you are not tied to STR regulations which are notorious in Colorado, and can be challenging to navigate. They are also easier to operate and produce solid returns. STRs do work around Denver, but you just need to navigate the regulations and find ways to differentiate your property as we do have high saturation. Luckily for either of these strategies, we have so many people that want to come to colorado that our demand for STRs and MTRs is very high year-round.2. What are your favorite locations and why?
Personally, I stick with the Denver Metro and into some of the foothills just outside Denver. Denver continues to have massive growth, and diverse employment, and leisure activities that we rarely see dips here. and the foothills provide a solid STR base for investors as well.
2. Do you have a team you love (especially if you're doing things long distance) and do you self-manage/have a refined system?
I mean, Im a bit biased, but yes I do like my team (it's me by the way). and I have long-distance investments out of colorado, but I am currently 1031ing those back into Colorado, as I see a better opportunity here. I currently Self manage all my units (LTRs, MTRs, and STRs), and have all the systems in place to make it easy.
3. Any other info that you find helpful with respect to the area or long-distance investing?
I help numerous out of state clients each year close on properties in Colorado, and it really comes down to the team on the ground. Find someone that really knows the area, and will work with you to develop your goals and strategy. If that clicks and they are on the same page as you long distance can be as easy as having one down the street. The gripes with Long distance come when you don't know who to call for an issue that arose at your property, and you can't physically be there.
- 3yRyan ThomsonBusiness MemberReal Estate Agent · Colorado Springs, CO · Member since 2018 · 1k+ posts · 1k+ votes
1. I have properties in Colorado Springs so my answer is yes to Colorado.
2. I really like places like Fairplay and Salida. I think they are less discovered and will become more and more popular.
3. Renjoy has an amazing property management system for STR.
4. I would google the "county + STR oridance" and "City + STR ordinance" if you are thinking about STR. City and counties have different rules and often the counties are much less restrictive.
The Assumable Guy544 Reviews - Denver · Member since 2021 · 28 posts · 59 votes3y
Quote from @Jossalyn Wallace:
Hey y'all, I live and invest in the FL Panhandle but like to travel. I am coming to the realization that I go to CO for a few weeks each winter and it may be worthwhile to purchase an investment property there. This would be my first long distance investment. I usually stay in Denver and travel to other areas (Keystone, CO Springs, etc) and my experience has been good, overall. I was wondering the following from folks that that have experience with the CO Market -
1. Would or wouldn't you invest here? And which investment style? ( ie BRRRR, flip, LTR, STR)
2. What are your favorite locations and why?
2. Do you have a team you love (especially if you're doing things long distance) and do you self manage/have a refined system?
3. Any other info that you find helpful with respect to the area or long distance investing?
Thanks in advance!
Love this post! I grew up in the Southeast and would take family vacations in the Panhandle (one of my favorite places in the world). I now live in Colorado (new favorite place) and can't say enough good things about being here. I won't be too knowledgeable about the investing market but I do know @Michael Healy might be able to help!
- Real Estate Agent · Destin, FL · Member since 2019 · 116 posts · 111 votes3y
Quote from @Teri Feeney Styers:
@Jossalyn Wallace so you are looking for short term rental as opposed to long term? What does "use it" mean to you and what do you want to do while here?
"Use it" means I want to occupy the property when I am there lol. I like to do winter sports and hike.
@Jossalyn Wallace I agree with what has been said above. Colorado is a great place to buy and invest. The short term rental market is changing by the day. HOA's, cities, towns, county's are changing rules and laws around it.
They have a housing shortage in the mountains for workers. In the past, people would buy houses with a lock off bedroom, they would rent the rest of the houses out to locals and keep the room for themselves.
My pages are great place to get more CO. information.
- Real Estate Agent · Destin, FL · Member since 2019 · 116 posts · 111 votes3y
Quote from @Ben Rhodin:
Hey @Jossalyn Wallace! Colorado has tons of opportunity still, and we have so many other facets other than just cash flow (which I think people get caught up in a lot) to work with, and our market is notoriously stable as well. I still have clients buying here in the Denver Metro, Boulder County, and into the foothills and many are able to achieve 10%+ COC returns. At the end of the day, it all comes down to your goals and investing strategy. I'll give you my answers for your questions down below!
1. Would or wouldn't you invest here? And which investment style? ( ie BRRRR, flip, LTR, STR)
I am actively investing in the Denver market, and have numerous clients doing so as well. Long-term rentals are mostly out, as the price-to-rent ratio is not favorable here. So unless you want to just do appreciation play, I would go creative. Most of my investing are in the MTR (Medium Term Rental) space due to the large medical field in the Denver Area, and numerous expansion projects going on. This strategy is fantastic as you are not tied to STR regulations which are notorious in Colorado, and can be challenging to navigate. They are also easier to operate and produce solid returns. STRs do work around Denver, but you just need to navigate the regulations and find ways to differentiate your property as we do have high saturation. Luckily for either of these strategies, we have so many people that want to come to colorado that our demand for STRs and MTRs is very high year-round.2. What are your favorite locations and why?
Personally, I stick with the Denver Metro and into some of the foothills just outside Denver. Denver continues to have massive growth, and diverse employment, and leisure activities that we rarely see dips here. and the foothills provide a solid STR base for investors as well.
2. Do you have a team you love (especially if you're doing things long distance) and do you self-manage/have a refined system?
I mean, Im a bit biased, but yes I do like my team (it's me by the way). and I have long-distance investments out of colorado, but I am currently 1031ing those back into Colorado, as I see a better opportunity here. I currently Self manage all my units (LTRs, MTRs, and STRs), and have all the systems in place to make it easy.
3. Any other info that you find helpful with respect to the area or long-distance investing?
I help numerous out of state clients each year close on properties in Colorado, and it really comes down to the team on the ground. Find someone that really knows the area, and will work with you to develop your goals and strategy. If that clicks and they are on the same page as you long distance can be as easy as having one down the street. The gripes with Long distance come when you don't know who to call for an issue that arose at your property, and you can't physically be there.
Thank you Ben! I am planning to take a trip to town end of Feb. Maybe we can connect while I am there and discuss/look at some possibilities.
- 3yBen RhodinBusiness MemberRealtor · Denver, CO · Member since 2020 · 338 posts · 331 votesNot a problem! Would love to connect, will send a DM!
Quote from @Jossalyn Wallace:
Quote from @Ben Rhodin:
Hey @Jossalyn Wallace! Colorado has tons of opportunity still, and we have so many other facets other than just cash flow (which I think people get caught up in a lot) to work with, and our market is notoriously stable as well. I still have clients buying here in the Denver Metro, Boulder County, and into the foothills and many are able to achieve 10%+ COC returns. At the end of the day, it all comes down to your goals and investing strategy. I'll give you my answers for your questions down below!
1. Would or wouldn't you invest here? And which investment style? ( ie BRRRR, flip, LTR, STR)
I am actively investing in the Denver market, and have numerous clients doing so as well. Long-term rentals are mostly out, as the price-to-rent ratio is not favorable here. So unless you want to just do appreciation play, I would go creative. Most of my investing are in the MTR (Medium Term Rental) space due to the large medical field in the Denver Area, and numerous expansion projects going on. This strategy is fantastic as you are not tied to STR regulations which are notorious in Colorado, and can be challenging to navigate. They are also easier to operate and produce solid returns. STRs do work around Denver, but you just need to navigate the regulations and find ways to differentiate your property as we do have high saturation. Luckily for either of these strategies, we have so many people that want to come to colorado that our demand for STRs and MTRs is very high year-round.2. What are your favorite locations and why?
Personally, I stick with the Denver Metro and into some of the foothills just outside Denver. Denver continues to have massive growth, and diverse employment, and leisure activities that we rarely see dips here. and the foothills provide a solid STR base for investors as well.
2. Do you have a team you love (especially if you're doing things long distance) and do you self-manage/have a refined system?
I mean, Im a bit biased, but yes I do like my team (it's me by the way). and I have long-distance investments out of colorado, but I am currently 1031ing those back into Colorado, as I see a better opportunity here. I currently Self manage all my units (LTRs, MTRs, and STRs), and have all the systems in place to make it easy.
3. Any other info that you find helpful with respect to the area or long-distance investing?
I help numerous out of state clients each year close on properties in Colorado, and it really comes down to the team on the ground. Find someone that really knows the area, and will work with you to develop your goals and strategy. If that clicks and they are on the same page as you long distance can be as easy as having one down the street. The gripes with Long distance come when you don't know who to call for an issue that arose at your property, and you can't physically be there.
Thank you Ben! I am planning to take a trip to town end of Feb. Maybe we can connect while I am there and discuss/look at some possibilities.
- House Hacking Specialist · Denver, CO · Member since 2016 · 411 posts · 396 votes3y
First and foremost, I think Colorado is a excellent area to invest. Regarding which style, that depends on the investor and their strengths. With out knowing your skill set and experience, i'd say LTR (K.I.S.S.). Yes BRRRR and STR's are sexy but would not recommend for first out of state investment.
I like Denver, Colorado Springs, and Pueblo. Mainly Colorado Springs b/c of price point, growth. Cashflow will not be the best but you will see amazing returns on your initial investment. If you are wanting more cashflow, you will need to put closer to 30% down.
The only time I would recommend self-managing is if you already own the asset and have a team in place before moving OOS. For example, I lived in Nebraska and owned a rental there. Moved to CO and continue to self manage.
Last point of advice, find your self a investor friendly agent that has a great team already in place you can piggyback off of (lender, PM, tax, handyman, etc).
I have a trends report that gives a deep dive into Colorado market (mainly Denver and Springs) you might find interest in if you are consider investing long term here. Ill DM you.
Best of luck!
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