Is there a market for $2000+ rentals in Colorado Springs?

Question

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.

Norberto Villanueva · Answer

@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!

Colin Smith · Answer

@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.

Account Closed · Answer

@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.

Kaley Roberts · Answer

@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.

Bill S. · Answer

@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.

Caleb Lieser · Answer

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.

Is there a market for $2000+ rentals in Colorado Springs?

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