In Colorado real estate many people do not have the money for 20% down on a investment property and decide to purchase in a cheaper market such as Pueblo. Compared to Denver and Colorado Springs, Pueblo has a significantly lower average home price at $290,000. Because of the lower barrier to entry in terms of cost you can possibly purchase two properties in Pueblo compared to Denver.
When deciding what market to buy in consider these items:
1) Population growth
2) Path of progress/quality location
3) Cash Flow
A growing market will have a higher chance of increasing rent prices and appreciation in housing prices. This will help when you need to find a new tenant for the property or when you look to sell. Pueblo County had a 6.4% population increase from 2010-2021, El Paso County (Colorado Springs) had a 17.7 increase, and Denver county 18% increase.
Buying in a ideal location where the city is continuing to grow or an area that is highly attractive will benefit your investment if it is hard to find tenants or you decide to sell. Many people look to live in these areas for the convenience to be near the amenities they enjoy.
Always buy real estate for cash flow! Purchasing a property that is not cash flowing within the first few months can be risky. If there are any major issues in those first months you may have to pay quite a bit out of pocket monthly. This is not the worst thing for experienced investors who buy real estate for the tax benefits, mortgage pay down, and long term appreciation.
Looking back at the cheaper markets, make sure you consider these items when purchasing. I personally only like a few sub areas of Pueblo, Colorado. Many areas can be rundown and difficult to find quality tenants.
The areas I would invest here are Pueblo West, which has great access to the reservoir and has grown quickly to the point where it could become it's own city separate from Pueblo. Another location is North Pueblo. This is a cute family area with easy access to highways to get downtown, the reservoir, and to the University.
Pueblo County, CO population by year, race, & more. USAFacts. (2022, September 17). Retrieved September 17, 2022, from https://usafacts.org/data/topics/people-society/population-and-demographics/our-changing-population/state/colorado/county/pueblo-county?endDate=2021-01-01&startDate=2010-01-01
Comments