Traditional and Airbnb Investments in the Colorado Real Estate Market

Not sure where to buy an investment property? Why not consider the Colorado real estate market?

Real estate investors are consistently looking for the right market to invest in and, as you should know, the real estate investing business is ever-changing. Also, with the many opportunities available for both traditional and Airbnb investments, one must be careful and choose the rental strategy that makes the best profits in his/her location. One thing to know about Colorado real estate is that it’s one of the best markets in the U.S for both traditional investments AND Airbnb investments!

The state of Colorado has a diverse landscape; from an arid desert, river canyons, snow-covered Rocky Mountains, to a vibrant downtown area in Denver, Colorado’s capital and largest city. Thanks to this diversity, real estate investors with different preferences in rental strategy are attracted to the Colorado real estate market. Where exactly in Colorado would you find the best investment properties? In 3 main cities: Denver, Boulder, and Fort Collins.

If you’re a Colorado real estate investor (or you’re planning on becoming one), keep reading as we explain what’s special about these cities, the optimal rental strategy and best neighborhoods in each of them.

The Denver Real Estate Market

Earlier this year, we interviewed Joe Mivshek, a real estate agent and expert who’s lived in Colorado for 30 years and knows the area very well. According to Mivshek, “The Colorado real estate market is still booming in terms of both residential and commercial real estate properties.” When asked about which cities did best in 2017, Denver and Boulder were at the top on his list. To read the full interview, click here.

As the capital of Colorado, the Denver real estate market has a strong economy thanks to the stable job market growth and a low unemployment rate. Last year, the city saw a 2.1% growth in the job market and an unemployment rate of 2.5% – much lower than the national average of 3.9%! As a matter of fact, the Denver Metro area is ranked 12^th in Forbes list of 2018’s best cities for jobs in the U.S.

Accompanied by this growing economy is a growing population as qualified employees are moving to Denver, leading the demand to increase for residential real estate properties. As a result, home prices of Denver real estate properties are rising. According to NeighborhoodScout’s data, Denver investment properties have a 10-year appreciation rate of 76.92%, which equates to an annual appreciation rate of 5.87%. This puts the Denver real estate market on top for long-term traditional investments! Thus, the optimal rental strategy for Denver real estate investors is Traditional.

Here are more numbers to know about traditional investments in the Denver real estate market, estimated by Mashvisor’s investment property calculator – a real estate investing tool that provides readily calculated numbers regarding investment properties in any city in the U.S. To learn more about our product, click here.

Median Property Price: $491,392
Traditional Rental Income: $1,865
Cash on Cash Return: 1.57%
Cap Rate: 1.57%

The Best Neighborhoods in Denver for Traditional Investments

#1 Union Station

Median Property Price: $352,503
Traditional Rental Income: $2,391
Cash on Cash Return: 3.07%
Cap Rate: 3.07%

#2 Stapleton

Median Property Price: $518,618
Traditional Rental Income: $2,293
Cash on Cash Return: 1.92%
Cap Rate: 1.92%

#3 Bear Valley

Median Property Price: $439,460
Traditional Rental Income: $1,740
Cash on Cash Return: 1.53%
Cap Rate: 1.53%

To start looking for the best Denver investment properties in your neighborhood of choice, click here!

The Boulder Real Estate Market

Next on the top cities of Colorado real estate is Boulder. The city offers a variety of investment opportunities from student housing, and single-family homes, to condos. This makes it a good choice for traditional investments, but going for Airbnb Boulder investment properties is the better decision. Let’s explain why.

Located on the foothills of the Rocky Mountains, and described as “the city nestled between the mountains and reality”, Boulder real estate investors benefit from its tourism industry. The city delivers an urban twist on the outdoor fun you’d expect. Tourists can hike miles of trails, bike alongside Boulder Creek, and head back for some shopping on Pearl Street all in a single day! Short-term rental demand is increasing in the Boulder real estate market. In our interview, Mivshek states that Boulder real estate “ has done well in the vacation rental market.”

As a matter of fact, Boulder is the second most active city in Colorado for Airbnb and it has certainly seen growth in the last few years. According to AirDNA, Boulder has an Airbnb occupancy rate of a whopping 86%! Moreover, Mashvisor’s investment property calculator’s projections on Airbnb investments in the Boulder real estate market further prove that the optimal rental strategy for Boulder investment properties is Airbnb.

Median Property Price: $1,025,103
Airbnb Rental Income: $3,956
Cash on Cash Return: 2.17%
Cap Rate: 2.17%

The Best Neighborhoods in Boulder for Airbnb Investments

#1 San Juan Del Centro

Median Property Price: $379,580
Airbnb Rental Income: $3,615
Cash on Cash Return: 5.45%
Cap Rate: 5.45%
Airbnb Occupancy Rate: 66.13%

#2 Sale Lake

Median Property Price: $493,678
Airbnb Rental Income: $3,582
Cash on Cash Return: 4.66%
Cap Rate: 4.66%
Airbnb Occupancy Rate: 66.33%

#3 Southeast Boulder

Median Property Price: $369,400
Airbnb Rental Income: $2,884
Cash on Cash Return: 3.12%
Cap Rate: 3.12%
Airbnb Occupancy Rate: 59.35%

To start looking for the best Boulder investment properties in your neighborhood of choice, click here!

The Fort Collins Real Estate Market

The final city in our list of the best cities of Colorado real estate is Fort Collins. Located a short drive north of Denver, this city is vibrant, full of local eateries and diverse cultural attractions. With its snow-capped mountains, peaceful lakes and clear-running rivers, people are outdoors and having family fun all year round. Based on this description, you can tell the optimal rental strategy for the Fort Collins real estate market is Airbnb!

Short-term vacation home rentals are a popular type of investment properties for Fort Collins real estate investors. And according to AirDNA, these make very profitable investments! The Airbnb occupancy rate is 82%, increasing the rental demand in the area. As you’ll see below, analytics from Mashvisor’s investment property calculator shows that Fort Collins investment properties are much more affordable than Boulder’s, yet they make a very close return on investment. This makes Fort Collins a good place for a new Airbnb real estate investor looking for affordable investments!

Median Property Price: $500,805
Airbnb Rental Income: $2,923
Cash on Cash Return: 2.86%
Cap Rate: 2.86%

The Best Neighborhoods in Fort Collins for Airbnb Investments

#1 Meadows East

Median Property Price: $366,808
Airbnb Rental Income: $2,989
Cash on Cash Return: 3.43%
Cap Rate: 3.43%
Airbnb Occupancy Rate: 55.86%

#2 Matinez Park

Median Property Price: $681,643
Airbnb Rental Income: $2,585
Cash on Cash Return: 1%
Cap Rate: 1%
Airbnb Occupancy Rate: 62.48%

To start looking for the best Fort Collins investment properties in your neighborhood of choice, click here!

Colorado Real Estate – Conclusion

Do you want to buy an investment property but not sure where to search for one? Consider one of the 3 top cities if you’re investing in the Colorado real estate market. Colorado real estate investors are offered different investment property types to go with their preferred rental strategy (traditional or Airbnb). Not only that but, if done right, you’ll soon enjoy a pretty good return on investment.

So, what are you waiting for? Sign up with Mashvisor and get full access not only to our investment property calculator but our Property Finder as well! With the help of these two tools, you’ll find investment properties in any city and neighborhood across the U.S in a matter of minutes.

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