A home serves many purposes — as a place to sleep, eat meals, and make memories with the ones you love. Not to mention, homes offer us the opportunity to build wealth over time, in a variety of ways, whether it’s through building equity, tax deductions, or rental income.
If you’re considering purchasing an investment property in Fort Collins, you’re in good company. This thriving city in Northern Colorado is an excellent place to purchase an investment or rental property, due to its promising real estate market, high demand for rentals, and many other factors. To help you navigate this decision, we’re sharing just a few reasons why Fort Collins is a wise place in which to invest.
Colorado—specifically Northern Colorado—has experienced sustained population growth over time, and will only continue to grow in the future.
In our Real Estate Forecast event at the start of the year, we welcomed State Demographer and Economist Elizabeth Garner, who presented fascinating data related to Colorado’s demographics and population changes. Notably, she mentioned that Northern Colorado is experiencing concentrated growth, with Weld and Larimer Counties increasing by 30.1% and 19.8%, respectively, between 2010 and 2020.
And that growth is expected to continue in the years ahead! Garner shared predictions of a slightly slower growth in the future (but growth nonetheless), as births will continue to decline and deaths will continue to increase due to an aging population. She predicts that migration will return to 2019 pre-pandemic levels and that the state will be able to bounce back in the wake of the pandemic.
What does this mean for real estate? It means that demand for housing will continue to increase, as Northern Colorado continues to attract more residents. And this typically translates to both higher housing and rent prices.
If you’ve been paying attention to the local market over the last several years, you might balk at “relatively affordable” in relation to Fort Collins. But when compared to some nearby metros, including Denver and Boulder, Fort Collins is the obvious winner in the affordability contest. And many prefer the quality of life in Fort Collins to other Colorado cities, which makes this a win-win!
While Fort Collins recently set a record for median home prices, reaching $495,000 in March 2022, you can still find homes within budget — if you’re willing to go a little bit further out of the heart of town. Check out these homes in Fort Collins under $400,000!
On the other hand, Fort Collins has seen steady appreciation over the decades. According to the FHFA House Price Index (FHFA HPI®), which provides indexes that measure changes in single-family home values in all 50 states and more than 400 American cities, Colorado has seen 534.4% appreciation since 1991.
The health of a job market is a sign of a healthy economy, for obvious reasons. In turn, this means an area makes for a more safe investment, from a risk perspective.
Despite the historic couple of years for employment and the economy, employment in Northern Colorado has bounced back significantly from the drop that occurred at the start of the pandemic. In Larimer County, employment went down 13.7% as a result of the pandemic, and is now up 11.1% since that drop. In Weld County, employment went down 12.8%, and is now up 10.4%. And in Boulder County, employment went down 10.4%, and is now up 10.3%. All in all, job recovery looks promising for Northern Colorado.
A few of the largest employers in Larimer County include UC Colorado Health, Hewlett Packard, Banner Health: McKee Medical Center, Broadcom, and Woodward, all of which employ more than 1,000 people each.
In a place as desirable as Fort Collins, you’re going to naturally experience a high demand for rentals. Not to mention, Fort Collins is home to Colorado State University, which provides a steady stream of renters, who are either in school or have recently graduated. Fort Collins is also a popular destination for Airbnb-ers, if you decide to go the short-term rental route.
And an occupied home means nothing if it isn’t profitable — but in Fort Collins, most houses will rent for what your mortgage is. According to RentCafe, the average rent in Fort Collins is $1,755, which is above the national average of $1,628. That means you can typically generate cash flow on a short-term basis, with the hope of a major return on your investment in the long run when you eventually sell the property.
At the end of the day — and you’ve heard this from every Realtor you know — it’s all about “location, location, location.” Experienced investors will tell you that a mediocre home in a desirable location is often more valuable than an incredible home in an undesirable location. And the reasoning is straightforward: you can update a home all you want, but you can’t move it. That’s why Fort Collins is an incredible place to buy a home — whether it’s for your primary residence or as an investment/rental property.
Fort Collins is perfectly positioned in the heart of Northern Colorado, with outdoor recreation all around. Plus, it is only about an hour from Denver, where residents can access big-city amenities, like catching a flight at DIA or cheering on the Broncos. But with the charming Old Town Fort Collins in our midst, there’s no reason to leave town at all. This historic district has it all — quaint cafes, exceptional restaurants, shops and boutiques, and craft breweries aplenty.
After all this, you may already be searching for your first investment property in Fort Collins. Not so fast! You will need an experienced real estate agent on your side, who can help you navigate the unique challenges associated with purchasing an investment property.
We have a network of Realtors who can walk you through every step of the buying process! Many of our Groupies have either purchased an investment property for their own portfolio or have walked several clients through the process. Contact us to get connected with one of our agents.
We strongly encourage you to consult with an attorney and an accountant before making any real estate purchase. Also, we can help you connect with a lender to learn about today’s loan options and interest rates.