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Top 5 Places in Colorado for Rental Property Investment

The Colorado housing market is among the most attractive in the country for real estate investors. The state ranks highly for several key factors:

  • 3rd best state for low property taxes
  • 8th best state for high traditional rental income
  • 8th best state for high Airbnb rental income
For years, Colorado has been an excellent location for buying investment properties. The state has seen a significant influx of people, largely due to the rise of remote work. Many are moving to their desired destinations, like Colorado, which has created a high demand for properties. As a result, the rental market in Colorado is thriving.

Here are the top five cities in Colorado to consider for rental property investment:

Aurora, a thriving suburb east of Denver, offers a diverse population and excellent outdoor recreational opportunities. Home to the University of Colorado’s Anschutz Medical Campus, Aurora has a strong healthcare industry and a high quality of life. With over 100 parks, green spaces are plentiful. Sports enthusiasts will appreciate its proximity to the home stadiums of the Denver Broncos, Colorado Rockies, and NBA champion Denver Nuggets.

Median Home Sale Price: $485,000
Cost of Living: 123,7 (national average is 100)
Average Salary: $89,560
Unemployment Rate: 3.8%
Total Employees Year Over Year: - 3.0
Well-being: 70/100
Diversity: 57.4/100
Net Migration: -0.2% per year

Aurora’s real estate market has appreciated by 99% since the first quarter of 2000, with an annualized growth rate of 3.45%. Currently, residential rent accounts for 41% of property sales, indicating a strong demand for traditional rental properties.

The city offers a relatively high average salary and boasts the highest diversity score on our list at 57.4. Despite a slight population decrease, Aurora maintains a robust well-being score of 70, thanks to excellent access to outdoor recreational opportunities and its proximity to Denver.
2. Denver
Located in the scenic South Platte River Valley, Denver boasts a thriving economy driven by the private sector. Its strategic geographic location makes it a key logistics hub for companies involved in trade and transportation services across the mountain, southwestern, and western states.

Median Home Sale Price: $620,000
Cost of Living: 127,6 (national average is 100)
Average Salary: $80,000
Unemployment Rate: 3,7%
Total Employees Year Over Year: +3.3%
Well-being: 74/100
Diversity: 42.8/100
Net Migration: -0.4% per year

Since the first quarter of 2000, Denver has seen a remarkable 133% increase in home values, with an annual growth rate of 4.26%. With half of the city's population renting their homes, Denver is a prime location for rental investments.

The city offers a high quality of life, strong economic opportunities, and stunning natural beauty. However, Denver also has the highest median home price in the region, reflecting its strong desirability.

3. Colorado Springs
Located at the base of the majestic Pikes Peak, Colorado Springs offers residents a unique combination of stunning natural scenery and vibrant urban living. As the state’s second-largest city (behind Denver), it’s home to a diverse economy and a thriving arts and culture scene.

Median Home Sale Price: $475,000
Cost of Living: 110,3 (national average is 100)
Average Salary: $75,000
Unemployment Rate: 2.9%
Total Employees Year Over Year: +2.09%
Well-being: 60/100
Diversity: 51.8/100
Net Migration: +0.4% per year

Since 2000, Colorado Springs has experienced a 92% increase in real estate values. With 41% of its residents renting, the city presents a competitive market for rental property investors. Colorado Springs offers a fantastic mix of urban amenities, natural beauty, and robust economic opportunities. It boasts a diverse and growing population, along with strong employee growth, making it an attractive destination for both residents and investors.
4. Longmont
Longmont, a self-governing municipality in Colorado, stands out for its exceptional safety. In 2011, it was ranked the second safest city in the state, highlighting its commitment to community well-being.

Median Property Price: $567,000
Price per Square Foot: $275
Average Salary: 80,000
Traditional Rental Income: $2,041
Traditional Cash on Cash Return: 1.3%

Longmont, the most expensive city on this list, offers strong investment opportunities in a buyer's market. Home values have risen by 90% since Q1 2000, with an average annual appreciation rate of 3.23%. About 39% of the population rents their homes. Longmont boasts the highest well-being score and average salary , providing a high quality of life and strong economic opportunities, complemented by its natural beauty.
5. Fort Collins
This vibrant college town, home to Colorado State University, boasts a diverse economy and a rich cultural scene, all nestled in the picturesque foothills of the Rockies.

Median Home Sale Price: $557,000
Cost of Living: 115,7 (national average is 100)
Average Salary: $71,000
Unemployment Rate: 2.4%
Total Employees Year Over Year: +2.4%
Well-being: 64/100
Diversity: 35.4/100
Net Migration: +0.7% per year

Fort Collins is an appealing market for real estate investors, characterized by appreciating home prices and a stable rental market. Positive net migration and employment growth enhance its desirability for rental investments. The city boasts a thriving population and the highest increase in total employees on our list. With a low unemployment rate and abundant outdoor recreational opportunities, Fort Collins offers an ideal balance between work and leisure.

When buying an investment property in Colorado, ensuring your financing is in order is paramount. Conducting a title search is essential, as it reveals any unpaid debts tied to the property, including municipal and HOA liens, outstanding mortgages, and associated documents like assignments and modifications.

Additionally, foreclosure actions, judgments, and liens against the property and its owner are reported. The search also determines the status of property taxes, indicating whether they're paid or delinquent. While some title companies may take a week or more to produce a report, ProTitleUSA's expert team completes title search in Colorado swiftly without sacrificing quality.

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