I live in California, but the market out here is getting so expense we're considering other places and Colorado Springs keeps popping up. Anyone live there and willing to provide some advice on what neighborhoods are worth investing in, which ones should be avoided (if any), and any unique things about Colorado Springs (or Colorado for that matter) I should consider? I understand snow may be an issue at times of the year. No so much for us here in San Diego.
This is just my opinion here, I personally would invest in all parts of Colorado Springs. I personally would take a "C" neighborhood over an "A" neighborhood any day as the ROI is much better. The management of the property itself is far more important than the neighborhood.
Something to note about Colorado Springs, our single family home prices have risen so quickly over the last few years the rents have not been able to keep up. If you're looking to put the minimum down on a single family (20%) and account for all short term and long term expenses, you're going to be a cash flow negative for a while till the rents rise high enough to keep up.
I would suggest looking at the small multi-family (requires 25% down). These can be equally challenging as there are very few worth considering on the market at any given in time - sometimes none at all and it can be a waiting game. The cash on cash is not going to be exceptional but we've seen significant appreciation even in these properties in the last several years. If the trend continues then you can have tremendous ROI in the long run meanwhile the minimal cashflow keep the property improving with forced appreciation through renovation and raising rents that may be under market value.
You need to connect with Erin Spradlin on here!
I am still renting here because it is cheaper and easier than buying when considering maintenance, cap expenses, insurance, higher utilities for a larger area and property taxes. It was hard to get the numbers to make sense even if househacking. I put in an offer and someone else bid over asking price with cash the 2nd day it was on the market, so homes go very fast. I would be aware of how the weather may affect your property and take into consideration the ability of the materials and structures of your property to withstand natural occurrences. Most notably, there are hail storms, areas prone to flash flooding and wild fires. However, homes are appreciating, population is increasing and there is a large US military presence that may be somewhat of a buffer in times of economic downturns. Tourism seems to support the economy as well, but Colorado Springs recently implemented stricter laws on short term rentals.
Hey Christopher! I second what has been said by @Colin Smith . It is a great place to invest as the city is growing quickly. It is consistently listed as a top place to live, and we have a large influx of people moving here from Denver and other parts of the country because in terms of the Colorado Front Range (Colo Spgs - Denver - Fort Collins) it is the most affordable. Cashflow is hard to come by if you are looking the single family market and like Colin said, multi-family is pretty competitive but not impossible to find. While the Springs did recently pass stricter laws on STRs like @Britteny Godar mentioned, they are not oppressive like Denver's STR regulations. You can see much better cashflow especially in peak season with STRs, but location is very important if you want year round traffic, as our tourism market is pretty seasonal. My wife and I own and manage several Airbnb properties around the city, so I would be happy to talk with you more about this if you are thinking to go that route.
What ways of monitoring for homes for sale have you found are best in the Colorado Springs? Is MLS the best approach?
@Ryan Riches - If you haven't heard yet, Colorado Springs just passed stricter Short Term Rental regulations as of the end of December 2019 for single family, duplex zoning, or PUD single family (along with a couple other zoning designations). Now you may only have a STR's in these if you also owner occupy the property. For all other zoned areas that allow STR's, you can no longer have a new STR 500 ft within another existing STR.
@Lizzie Carver - haha. Thank you for the shout out.
@Colin Smith - Adding to what Colin Smith said, the new restrictions dramatically changed the short-term rental play in Colo Spgs. It actually made it better for people that have STRs and worse for people trying to get in... That said, if you can find ways to work around the 500 foot rule and be patient with the CS planning dept (which is being inundated at the moment with questions), you can still find properties that work. We have a client under contract with this plan that implemented it post the law changing. To me, it's just important to consider what your short, medium and long term plays are and to understand that STRs continue to have new and untested laws, which can still benefit you if you are okay with the shifting and a little regulatory insecurity.
I second what @Erin Spradlin said. We are about to finish a remodel on a 4-plex and are going to turn all 4 units into Airbnb’s which is still allowed in C/S.