Colorado Springs

[DirtDiva]

Is anyone doing real estate investing in Colorado Springs/Manitou Springs?  I am currently working my way through the reading list with no plans for action in the very near future. I have some cash and I want to diversify from my current portfolio of index stock and bond funds.   I think I would be considering landlording opportunities.

[bizzy]

My uncle bought a house in this city. He resides out of the country for most of the year and goes to CS two weeks every 4 months. He wants to sell it and move her to CA. He said its extremely cold over there and his home has to have around the clock heating. The first time he left the house unoccupied and turned the power off. When he came back 4 months later the house had a lot of pipes frozen and blown. So now he always leaves the house heated even unoccupied.
I guess if you will have it rented out for the most part you should be ok.

[DirtDiva]

Coming from Maine-pretty sure I can handle the "brutal" winters. Forecast shows 36f here and 75f in Co Springs this weekend.

I was wondering more about the real estate market. Houses look inexpensive there compared to my current area.  Any experienced landlords from the area, and thoughts on projections for appreciation?

[lovesasa]

I spent 5 years living in Colorado Springs as a renter. The winters aren't that bad, but you do need to keep a baseline level of heating or the pipes will blow, which is the same as... anywhere with a real winter. Other than snow in the winter we don't have a lot of natural disasters to worry about, though there is a higher fire danger as it is alpine desert.

I would be careful about buying a rental property near the colleges, especially CC. It's an appealing idea because you can charge high rents but most of the properties right near the college are pretty slum-lordy and haven't had very good upkeep. That being said, you can probably still rent a place out even in disrepair as long as it's a block or two from campus. Not my cup of tea, personally.

The east side near downtown (along the running path) is really cute and you can find nice some nice looking properties, but unfortunately it can be a pretty sketchy area and I wouldn't trust the tenants to be high quality. A bit further north of downtown is better, and more family oriented. Manitou Springs is probably more families and such. If you can find one of the suburb areas that the military families rent in that might be one of your best bets. They're probably a bit more stable and willing to keep the place nice, and you have a constant pool of renters. Peterson Air Force Base is East of town and Fort Carson (Army) is south. I've heard Fort Carson is one of the largest Army Bases in the southwest, so that would be a big pool of potential renters. A lot of people live off base.

All of this being said, I have not personally been a landlord in Colorado Springs. I can just give my impressions from renting and living there.

[MishMash]

We own a rental house there, it's basically a break even for us after taxes since we have it on a 15 year mortgage up in the Briargate area.  Every year it's a FLOOD of applications (literally last year we have 40 requests in 24 hours to see the house and 15 rental applications in that time, our current tenant just extended their lease through 2016, six months before they had to renew).  We bought it in 09 so it's appreciated about 50k in that time, however I don't see it appreciating anywhere near that in the future, I'm expecting 1-2% a year, typically we raise rents 25/m per year.  There is a constant flood of military into the area, you have NORAD, SMDC, Peterson, Carson, Air Force Academy etc.  Even with potential downsizing there will always be a lot of tenants, but there will be a lot of houses yearly too with all the military that bought moving out so you have to have something that sets your house apart.

[waltworks]

What do places sell/rent for? If you can't find anything in the 1% rule range, forget it. And my guess (I have not lived there since the 90s) is that nowadays you can't.

I could be wrong but I would not be looking at cities in CO for rental properties, in general.

-W

[DirtDiva]

No, I don't think the 1% rule could be met.  (Had to look it up-to-date complete noobe here).   It looks like a 180k place would rent for about 1200-1400.  ( just by eyeballing the classifieds).

I'll keep reading and learning.  Thanks for taking a moment to share your collective knowledge and experience.