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ForumsArrowColorado Springs Real Estate ForumArrowIs there a market for $2000+ rentals in Colorado Springs?
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Is there a market for $2000+ rentals in Colorado Springs?

10 Replies | Colorado Springs, Colorado

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  • Posts 20
  • Votes 2

Josh Barnett
from Colorado Springs, CO

posted about 3 years ago

I am active duty military and will be moving to Colorado Springs in May and looking to buy an owner occupied home. We would possibly move in 3 years and I want to make sure the home would work as a rental. I'm looking for houses in district 12, 11, and 20. The majority of houses that would work for my family are around $300k. To make this house work as a rental after year 3, it would have to rent for $2100. Is there a market for a 3bd/2ba around 1900sq. ft. house renting for this much?  It seems high based on military housing alowance, would require at least a Lieutenant Colonel to afford it. 

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  • Posts 7
  • Votes 0

Caleb Lieser
Investor from Colorado Springs, Colorado

replied about 3 years ago

I doubt that is going to be within the market rent. Right now it is definitely high.  I have a total of 5 units and 2 of them are 3bed 2 bath renting for 1250 which is very near market. Those are in D11 and smalller units than you are talking about 1150 sq ft. my other property right near carson is a 2500 sq ft and market rent on that is around 1850. These are just to give you an idea of current market trends in the area. 

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Check Rosette Top Subjects:
Rentals, Single Family, and Maintenance
  • Posts 678
  • Votes 1.1K

Jonathan Hulen
Rental Property Investor from Torrance, CA

replied about 3 years ago

Generally speaking the higher you go in property class the less cashflow you will get. I don’t know Colorado Springs, but I’m guessing 300K is higher end. If you need to cashflow you will probably have to buy a less expensive home.

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  • Posts 169
  • Votes 153

Robin Searle
Real Estate Agent from Colorado Springs, CO

replied about 3 years ago

I’m a tiny rental fan. I have a 785 sq ft 2/1/1 that rents for $1200/mth in the Springs. Less property tax and insurance and maintenance costs.

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  • Posts 117
  • Votes 45

Bryan Cork
from Colorado Springs, Colorado

replied about 3 years ago

@Josh Barnett
I agree with
@Caleb Lieser
@Jonathan Hulen

I have a rental in D 20 that is a 1700sqft 3/2 that is currently renting at $1550, market value is probably $1650, and worth probably $275k. You can certainly find 2k per month rentals out there but they will be 4beds and cost you 325k. And being on the north side of town you will have less army tenants and more air force as far as military. I have had really good luck finding stable families to rent to and haven’t had any crazy tenant stories so far. Some of that is luck, but some is the pool of applicants I’m able to draw from. They seem to have higher income and credit scores. So I’m sure there is a trade off with my ROI vs the stability of the asset and cash flow.

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Check Rosette Top Subjects:
Traditional Financing, Team, and Maintenance
  • Posts 869
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Colin Smith
Realtor from Colorado Springs, CO

replied about 3 years ago

@Josh Barnett - There are $2k+ rental markets in Colorado Springs, just keep in mind that the three largest players in getting you above the $2k range are location, size of home, and condition of home. A small home in a nice neighborhood will not cut it. Areas you'll want to look at are Manitou Springs (won't be in your preferred district), Rockrimmon, Briargate Pkwy / Research Pkwy, and more north. To give you a little perspective, we manage one rental property on the very north end of Colorado Springs that is renting for $3,200 / month, but the property is a $700,000+ home. Can you find something that will rent for $2k+ in a $300k budget, I think its possible but we are definitely going to have to be patient and move quickly when something like that comes up. In order to make this happen, you're likely going to need at a minimum 2,500 sq ft in those areas.

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  • Posts 234
  • Votes 174

Jeff Ronningen
Investor from Cincinnati, Ohio

replied about 3 years ago

Sounds like the numbers may not work for you based on other comments. Why not buy a lesser home that is in the sweet spot of the SFRs for the area and cash flows better? Rent the $300k Home you say your family needs and use cash flow from the rental to offset your rent. Might be a lower risk and more sustainable way to get what you want.

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  • Posts 94
  • Votes 41

Account Closed

replied about 3 years ago

@josh Barnett the military makes 40% of the jobs in the Springs, that's quite a bit. If you are planning to be located close to base since you are active duty it may be worth wild to stay around that E-5 BAH rate. I think it will be tough for you to find that 2k/mo rent and though I don't think the economy will have issues here if jobs dwindle it will be harder to rent something at 2k. 

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Check Rosette Top Subjects:
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  • Posts 247
  • Votes 91

Norberto Villanueva
Real Estate Broker from Colorado Springs, CO

replied about 3 years ago

@Josh Barnett - With too many variables left unanswered, it's hard to say. For example, a search for $2,100+ rentals in the MLS returns 23 active listings, 245 leased in the last year. A change to search for those that are less than 1,900 sq ft returns 343 leased in the last year, 17 in active status. Interestingly, there is one that came on the market 2/6/2018 with an asking rate of $2,300 a month. Having sold for $160k in 2005, it has a current value range estimate of $203k - $253k.

I suggest taking a different approach, which is to back into buying a home that makes sense based on your purchase criteria and exit strategies. By carefully comparing purchase price to market sales and rental values, you are relatively assured of making the best investment decision possible going in. 

BTW, with an analysis of needing $2,100 in rent for a $300k purchase being spot on, you are definitely on the right track.

All the best! 

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Check Rosette Top Subject:
Residential
  • Posts 4.3K
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Bill S. (Moderator) -
Rental Property Investor from Denver, CO

replied about 3 years ago

@Josh Barnett who knows where the rental market will be in 3 years. I pretty much agree with the other's thoughts. Too many variables to make a call except to say you will be on the high end which is challenging. Right now, it's not likely to fly. Rents have gone up 10% per year for a few years. If they do the same for you then it's much more doable.

I wouldn't buy on that expectation.

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  • Posts 22
  • Votes 13

Kaley Roberts
Real Estate Agent from Colorado Springs

replied about 3 years ago

@Josh Barnett we have 4 places in the D12 and I think a 2100 rental is out there but not for 300k in the Broadmoor area. Well there is always something if you have the patience to wait for it. I would reccomend a larger down payment to offset your mortgage. It doesn't hurt having your hard earned dollars parked in a house and it's a even safer bet if it's parked in a house in the D12. The school district is the best and it is sought after by renters and buyers alike. Any questions feel free to reach out. 

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