Why Colorado Springs for Real Estate Investment
Colorado Springs is the second-largest city in Colorado and one of the strongest real estate investment markets on the Front Range. The city's economy is anchored by five military installations. Fort Carson Army Post, Peterson Space Force Base, Schriever Space Force Base, Cheyenne Mountain Space Force Station, and the United States Air Force Academy. Together, these bases employ over 40,000 military personnel and generate billions in annual economic impact.
Beyond the military, Colorado Springs has become a hub for defense contractors, aerospace companies, and tech firms. The U.S. Space Command headquarters, Amazon distribution facilities, and the growing cybersecurity sector have diversified the economy well beyond its military roots. The city also holds the designation of Olympic City USA as home to the United States Olympic and Paralympic Training Center.
For investors, the combination of lower entry prices compared to Denver (roughly 20-30% below Denver metro medians), reliable military-driven rental demand through Basic Allowance for Housing (BAH), and continued population growth makes Colorado Springs one of the most compelling markets in the state. Here is what each neighborhood offers.
1. Old Colorado City (OCC)
- Cosmetic flips. Older homes with good bones respond well to kitchen/bath updates and curb appeal improvements
- Short-term rental potential. Garden of the Gods draws over 2 million visitors annually, and OCC sits at the gateway
- Mixed-use plays. Some properties along W. Colorado Ave have commercial/residential zoning flexibility
- Walkable neighborhood with galleries, restaurants, and independent shops along W. Colorado Avenue
- Strong tourist traffic from Garden of the Gods, Manitou Springs, and Pikes Peak creates short-term rental demand
- Appreciation has outpaced many Colorado Springs neighborhoods due to character and location premium
- Unique housing stock. Victorian-era homes, bungalows, and cottages that attract buyers willing to pay for character
- Limited parking. Street parking is the norm, which can affect rental appeal for some tenants
- Commercial noise along W. Colorado Ave. Properties one block off the main strip are quieter and often better rentals
- Older construction (1890s-1950s) means potential for foundation, plumbing, and electrical issues that increase rehab costs
- City has been tightening short-term rental regulations. Verify current licensing requirements before banking on STR income
2. Southeast / Powers Corridor / Stetson Hills
- Turnkey rentals. Newer construction means minimal rehab needed, and military families prefer move-in-ready homes
- Buy-and-hold with military tenants. BAH rates provide a predictable rental income floor
- Minimal-rehab flips. Cosmetic updates to 2005-2015 homes that feel dated but are structurally sound
- Newer housing stock means lower maintenance costs and fewer surprise repairs
- Stable rental demand driven by military families. Fort Carson alone has approximately 24,000 active-duty soldiers
- Good schools in District 49 (Falcon and surrounding areas) attract families and support property values
- Retail and commercial development along Powers Blvd provides strong tenant amenities
- Cookie-cutter subdivisions with less character. Harder to differentiate your rental or flip from surrounding inventory
- HOA-heavy. Many subdivisions have monthly HOA fees ($50-$150/month) that eat into cash flow
- Less appreciation upside compared to established neighborhoods with character and scarcity
- Military base realignment (BRAC) is always a background risk, though unlikely given Space Command investment
3. Fountain / Widefield / Security
- Entry-level buy-and-hold. Lowest price point in the metro area with reliable rental demand
- Section 8 and military housing. Properties in this price range align well with Housing Choice Voucher payment standards
- Value-add flips. Older ranch-style homes from the 1970s-1990s that can be updated for $30K-$50K and resold at solid margins
- Lowest entry point in the Colorado Springs metro. Investors can get into the market with less capital
- Reliable rental demand from Fort Carson soldiers and civilian base employees
- BAH for the Colorado Springs area applies here, meaning rental income potential is not proportionally lower despite cheaper prices
- Fountain has its own growing downtown area with revitalization efforts underway
- Older housing stock (1960s-1990s). Expect to encounter aging roofs, outdated electrical panels, and original HVAC systems
- Widefield School District 3 and Fountain-Fort Carson District 8 are less desirable than D20 or D11, which can limit tenant pool
- Appreciation has historically lagged the rest of the metro, though the gap has narrowed in recent years
- Perception issue. Some investors and tenants view this area as less desirable, which can affect resale timelines
4. Downtown / Ivywild / Old North End
- Historic renovations. Old North End has Victorian and Craftsman homes from the 1890s-1920s that command premium prices after restoration
- BRRRR in Ivywild. This neighborhood is still mid-gentrification with properties available below $450K that appraise well after renovation
- Small multi-family. Duplexes and triplexes exist in the downtown fringe areas with strong rental demand from young professionals
- Walkability and culture. Downtown has seen significant investment in restaurants, breweries, and entertainment venues
- Strong rental demand from professionals, Colorado College students, and Olympic Training Center affiliates
- Appreciation trajectory is strong. Ivywild in particular has seen values climb as the former school building was converted into a popular market and community hub
- Small multi-family properties are available in the downtown fringe, which is rare in Colorado Springs
- Old North End is expensive. Median prices exceed $600K for the most desirable streets, limiting investor margins
- Historic overlay zones in parts of Old North End may restrict exterior modifications, affecting rehab plans
- Downtown properties near Tejon Street can have noise and parking challenges that affect long-term rental appeal
- Competition from owner-occupants is strong in these neighborhoods, meaning investors face bidding pressure
5. Cimarron Hills / Vista Grande
- Value-add flips. 1970s-1990s ranches and bi-levels that can be modernized with $25K-$45K in cosmetic work
- Long-term buy-and-hold. Affordable acquisition prices paired with solid rents create respectable cash-on-cash returns
- Rent-to-own programs. The price point attracts tenants transitioning from renting to buying
- Affordable price point for investors who want to stay in El Paso County without going to Fountain
- Close proximity to Peterson Space Force Base. Short commute for military and defense contractor tenants
- Established infrastructure. Mature trees, full commercial services, and easy access to Powers Blvd and I-25
- Diverse housing stock provides options across multiple price tiers within the same general area
- Some pockets have higher property crime rates compared to north-side neighborhoods. Research specific streets before buying
- Older homes need work. Expect original windows, aging siding, and HVAC systems nearing end of life
- Unincorporated El Paso County areas nearby have different zoning and permitting processes than City of Colorado Springs
- Appreciation has been moderate rather than strong. This is a cash flow play more than an equity growth play
6. Northgate / Briargate
- Long-term rental properties. Families pay premium rents for D20 school access, and tenant turnover tends to be low
- Turnkey holds. Homes from the 2000s-2010s require minimal work and attract high-quality tenants immediately
- Executive rentals. Military officers and defense executives relocating to the Springs often rent before buying
- Academy School District 20. Consistently ranked among the best in Colorado, creating strong and sustained demand from families
- Low crime rates. North Colorado Springs has some of the lowest property and violent crime rates in the metro
- Strong family demand means lower vacancy and tenants who take care of properties
- Proximity to Air Force Academy and new development north of Interquest Parkway supports long-term appreciation
- Higher entry point. The $450K-$550K range means more capital needed and thinner margins on flips
- Lower rental yield relative to price. A $500K home might rent for $2,200-$2,500/month, which is tight on cash flow
- HOA fees are common in master-planned communities and reduce net operating income
- Competition from owner-occupants is intense. Families who want D20 schools will outbid investors on desirable properties
Side-by-Side Comparison
| Neighborhood | Median Price | Best Strategy | Rental Demand | Entry Difficulty |
|---|---|---|---|---|
| Old Colorado City | $350K-$450K | Cosmetic flips, STR | Strong (tourist + resident) | Moderate |
| SE / Powers / Stetson Hills | $400K-$500K | Turnkey rentals | Very strong (military) | Moderate |
| Fountain / Widefield / Security | $320K-$400K | Buy-and-hold, Section 8 | Strong (military) | Low |
| Downtown / Ivywild / Old North End | $400K-$600K+ | Historic reno, BRRRR, multi-family | Strong (professionals) | High |
| Cimarron Hills / Vista Grande | $350K-$420K | Value-add flips, long-term holds | Moderate-strong | Low-moderate |
| Northgate / Briargate | $450K-$550K | Long-term rental, executive | Strong (families) | High |
Colorado Springs Market Context
Colorado Springs is not just a military town anymore. Though the military remains the economic backbone. The city's five installations (Fort Carson, Peterson Space Force Base, Schriever Space Force Base, Cheyenne Mountain Space Force Station, and the United States Air Force Academy) create a permanent floor under housing demand. When soldiers receive Permanent Change of Station orders to the Springs, they need housing immediately, and many prefer to rent rather than buy during a typical 3-year assignment.
Basic Allowance for Housing (BAH)
BAH is the military's housing stipend, and it effectively sets a rental rate floor for military tenants. For the Colorado Springs area, 2026 BAH rates for an E-6 with dependents (a common tenant profile) are approximately $2,100-$2,200 per month. Officers and senior NCOs receive more. This means a property that rents within the BAH range will always have demand, regardless of broader market conditions.
Tech and Defense Growth
The U.S. Space Command headquarters brought hundreds of high-paying jobs and associated contractors. Companies like L3Harris, Northrop Grumman, Raytheon, and Boeing maintain significant operations in the Springs. Amazon opened a fulfillment center. These non-military jobs add depth to the rental market beyond BAH-driven demand.
Price Advantage Over Denver
Colorado Springs median home prices remain 20-30% below the Denver metro average. For investors, this means lower capital requirements per deal, better cash-on-cash returns at similar rent levels, and more room in the spread between acquisition cost and after-repair value on flips.
Investor Tip: The BAH Advantage
When analyzing a rental property in Colorado Springs, look up the current BAH rate for the area and target your rental price to fall within the BAH range for E-5 to E-7 with dependents. This is the largest tenant pool. Properties priced at or just below the BAH ceiling rent fastest and have the lowest vacancy rates.
What to Watch
- Water: Colorado Springs sources water from multiple systems, but long-term water availability in the Arkansas River basin is a factor for the broader region. This has not materially impacted values yet, but it is a long-term consideration.
- I-25 Gap Project: The widening of I-25 between Monument and Castle Rock (completed sections opening 2024-2026) makes commuting between the Springs and Denver metro more viable, which could support appreciation as the two metros become more connected.
- Short-term rental regulation: The City of Colorado Springs has been updating its STR ordinance. Verify current requirements before relying on short-term rental income in your analysis.
- Property taxes: El Paso County property taxes remain relatively low compared to Denver metro counties, which benefits cash flow. However, check for metropolitan district (metro district) inclusions in newer subdivisions. These can add significant mill levy surcharges.
Informational only. This guide is for general educational purposes and reflects market conditions and figures available at the time of writing. Real estate markets, prices, and regulations change — verify current figures and consult a licensed real estate, financial, or legal professional before making investment decisions. EZ Investments is a real estate company, not a financial advisor.