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The Climb16 min read

The Complete Guide to Real Estate Investing in Colorado Springs

Military megahub, Space Command headquarters, rapid growth, and a median price well below Denver — a market where cash flow is possible if you dodge the hail.

Colorado Springs has emerged as one of the most compelling real estate markets along the Front Range, offering investors something Denver increasingly cannot: workable cash flow. With a median home price of approximately $420,000 in El Paso County, Colorado Springs is roughly 28% cheaper than Denver while sharing many of the same lifestyle advantages — mountain views, 300 days of sunshine, and access to world-class outdoor recreation. The difference: Colorado Springs is anchored by one of the largest military concentrations in the United States, creating a tenant base with predictable income, regular turnover, and strong housing demand.

This guide provides an honest assessment of investing in Colorado Springs as of early 2026, including economic drivers, rental yields, neighborhood analysis, and the risks you need to understand before deploying capital.

Why Colorado Springs: Economic Fundamentals

The Colorado Springs MSA has a population of approximately 760,000 (U.S. Census Bureau, 2024 estimates), making it the second-largest metro in Colorado. Population growth has been strong, averaging approximately 1.3% annually over the past five years — outpacing Denver's recent growth rate. The city of Colorado Springs has a population of approximately 490,000.

Median household income for the MSA is approximately $78,500 (Census ACS, 2023 5-year estimates), slightly below Denver but well above the national median. The unemployment rate was 3.6% as of Q4 2025 (BLS LAUS), below the national average. Total nonfarm employment was approximately 325,000.

Military Installations

The military is the dominant economic force in Colorado Springs. The combined military presence accounts for approximately 40% of the local economy, making this one of the most military-dependent metros in the nation:

  • Fort Carson: U.S. Army installation south of the city, home to the 4th Infantry Division. Approximately 25,000 active-duty soldiers and 30,000+ family members. Fort Carson is the single largest employer in the region.
  • Peterson Space Force Base: Headquarters of U.S. Space Command and U.S. Northern Command (NORTHCOM). Approximately 7,000 military and civilian personnel.
  • Schriever Space Force Base: Located east of the city, home to the Space Operations Command and 2nd Space Operations Squadron. Approximately 8,000 personnel including contractors.
  • NORAD (Cheyenne Mountain Complex): The iconic North American Aerospace Defense Command facility, built inside Cheyenne Mountain. Approximately 1,200 personnel.
  • U.S. Air Force Academy: Located north of the city, the Academy employs approximately 4,000 military, civilian, and contract personnel in addition to its 4,000 cadets.
  • U.S. Space Command HQ: After years of debate, the Pentagon confirmed in 2023 that U.S. Space Command headquarters would remain permanently at Peterson SFB in Colorado Springs rather than relocating to Huntsville, Alabama. This decision secures thousands of high-paying jobs and long-term federal investment.

Investor significance: The military creates a reliable, government-backed tenant pipeline. PCS (Permanent Change of Station) moves generate regular turnover, ensuring consistent demand for rental housing. BAH (Basic Allowance for Housing) provides predictable, guaranteed rental income pegged to local market rates. The E-5 with dependents BAH rate for Colorado Springs is approximately $2,100/month as of 2026.

Defense and Aerospace Contractors

The military presence has attracted a cluster of major defense contractors:

  • Lockheed Martin: Significant operations supporting space and missile defense programs, approximately 2,500 local employees.
  • Northrop Grumman: Space systems and cybersecurity operations, approximately 1,500 employees.
  • L3Harris Technologies: ISR (intelligence, surveillance, reconnaissance) systems, approximately 1,800 employees.
  • Boeing: Defense programs and satellite systems, approximately 800 employees.
  • Raytheon: Missile defense and cybersecurity, approximately 1,200 employees.

These defense contractors provide high-paying civilian jobs ($80,000–$150,000+) that support the mid-to-upper rental and housing market.

Healthcare and Other Employers

  • UCHealth Memorial Hospital: The largest non-military employer, approximately 8,500 employees across multiple campuses.
  • Penrose-St. Francis Health Services (CommonSpirit): Approximately 3,500 employees.
  • Amazon: Fulfillment center and distribution operations, approximately 3,000 employees.
  • USAA:Major regional campus, approximately 2,000 employees. USAA's presence underscores the military community connection.

Home Prices and Affordability

  • El Paso County median: Approximately $420,000 (Zillow ZHVI, early 2026)
  • Colorado Springs city: Approximately $415,000
  • East side (Cimarron Hills, Widefield): $310,000–$370,000
  • Southeast (Fountain, Security): $320,000–$380,000
  • Northeast (Falcon, Peyton): $400,000–$480,000
  • North/Briargate:$450,000–$550,000
  • Westside/Old Colorado City: $350,000–$430,000

Colorado Springs experienced rapid appreciation from 2019 to 2022, with prices rising approximately 40% in three years. The market corrected modestly in 2023 (approximately 3–5%) before stabilizing. The price-to-income ratio of approximately 5.3x is elevated but significantly more manageable than Denver's 6.7x.

Rental Yields and Cash Flow

  • Gross yield (affordable areas, $310K–$380K): 7–8.5%
  • Gross yield (mid-range, $400K–$480K): 5.5–7%
  • Gross yield (premium, $500K+):4.5–5.5%
  • Cap rate (stabilized):5–7% depending on submarket
  • Cash-on-cash return (25% down, 7.0%):0–5% in affordable areas; negative in premium areas

Colorado Springs offers meaningfully better cash-flow potential than Denver. A 3BR home in Fountain or Security at $340,000 renting for $2,000–$2,200/month can produce modest positive cash flow at 25% down and current rates. The military tenant base anchors demand and keeps vacancy low (typically 3–5% for well-located properties near installations).

Property Taxes

  • Effective property tax rate (El Paso County): Approximately 0.49%
  • On a $420,000 property: Approximately $2,058 annually

Colorado's property taxes are among the lowest in the nation, and El Paso County's 0.49% effective rate is a significant advantage for investors. Like the rest of Colorado, the 2023 statewide reassessment increased assessed values substantially, but temporary rate reductions partially offset the impact.

Insurance and Climate Risk

  • Average annual DP-3 landlord policy: $1,600–$2,400 for a typical single-family rental
  • Newer construction with impact-resistant roof: $1,200–$1,800
  • Older construction:$2,000–$3,000

Hail is the primary climate risk.Colorado Springs sits in one of the highest-hail-frequency corridors in the United States. The Front Range experiences multiple significant hailstorms annually, and the 2023 and 2024 storm seasons caused billions in insured losses across the Colorado Springs and Denver metros combined. Insurance premiums have risen 15–25% since 2022 for many properties.

Mitigation strategy:Prioritize newer construction (2010+) with Class 4 impact-resistant roofing (UL 2218 rated). Impact-resistant roofs can reduce insurance premiums by 15–30% and dramatically reduce hail damage claims. When evaluating older properties, budget $8,000–$15,000 for a roof replacement with impact-resistant shingles as part of your acquisition cost.

Other climate risks are moderate. Colorado Springs has a dry, semi-arid climate with relatively low wildfire risk within the city (though the western interface areas near Waldo Canyon carry elevated wildfire risk), no flood risk for most properties, and no hurricane or earthquake exposure.

Key Neighborhoods for Investors

Fountain and Security-Widefield

Located south of the city near Fort Carson, these communities are ground zero for military rental demand. Homes priced $310,000–$380,000. 3BR rents of $1,900–$2,200. Schools rate 4–6/10. The tenant base is heavily military (E-4 through E-7 ranks), and BAH-pegged rents provide income stability. Turnover is higher than civilian markets (PCS cycles every 2–3 years), but demand reliably fills vacancies within 2–4 weeks during PCS season (May–August).

East Colorado Springs and Cimarron Hills

The most affordable areas within city limits, with entry points of $290,000–$360,000. 3BR rents of $1,700–$2,000. Schools rate 3–5/10. Some areas have higher crime rates. This is a cash-flow-first strategy — buy affordable, rent to Section 8 or working-class tenants, and focus on yield rather than appreciation. Screen tenants carefully.

Northeast (Falcon, Peyton)

Rapidly growing suburban communities east and northeast of the city. Newer construction (2015+) priced $400,000–$480,000. 3BR rents of $2,200–$2,600. Schools rate 6–8/10. Strong tenant demand from military families (Peterson and Schriever SFBs) and defense contractor employees. Lower yields but higher-quality tenants and stronger appreciation potential.

Briargate and Northgate

The premium north-side neighborhoods, anchored by excellent schools (7–9/10) and proximity to the Air Force Academy and USAA campus. Homes priced $450,000–$600,000. 3BR rents of $2,400–$2,900. Cash flow is thin at these price points, but tenant quality is excellent (officers, defense civilians, tech workers). This is an appreciation and quality-of-tenant play.

Old Colorado City and Westside

An artsy, eclectic area near Garden of the Gods and Manitou Springs. Homes priced $340,000–$430,000, often older homes with character. The area attracts a different tenant demographic: healthcare workers (near UC Health), outdoor enthusiasts, and creatives. Moderate cash-flow potential with upside from the neighborhood's increasing desirability.

DSCR Lending in Colorado Springs

Colorado Springs is a viable DSCR market, particularly in the affordable submarkets. Typical terms (early 2026):

  • LTV: 75–80%
  • Rate: 7.0–8.0%
  • Minimum DSCR: 1.0–1.25x
  • A $350,000 property renting at $2,100/month has a DSCR of approximately 1.05–1.15x at 75% LTV and 7.0%, which meets minimum requirements for many lenders. This is a meaningful advantage over Denver, where most properties fail DSCR requirements.

Colorado Landlord-Tenant Law

Colorado Springs is subject to the same state landlord-tenant laws as Denver, including the 10-day notice to pay or vacate and strengthened habitability standards. However, Colorado Springs does not have the “right to renew” ordinance that Denver passed in 2023, meaning landlords retain more flexibility regarding lease non-renewals.

  • Eviction timeline:10-day notice, then court filing. Typical total process: 4–6 weeks.
  • State income tax: Colorado flat 4.4% on rental income.
  • No local rent control: Colorado Springs has no rent control or just-cause eviction ordinance at the local level.

Sample Proforma: Military Rental in Fountain

Use our Proforma Calculator to model your own Colorado Springs deals.

Acquisition

  • Purchase price (3BR/2BA, 2015 construction): $350,000
  • Closing costs (3%): $10,500
  • Minor repairs and turnover prep: $2,500
  • Total invested: $363,000

Monthly Income and Expenses

  • Monthly rent (pegged near BAH): $2,100
  • Vacancy (5%): -$105
  • Property management (8%): -$168
  • Maintenance (5%): -$105
  • CapEx reserve (5%): -$105
  • Property taxes (0.49% of $350K = $1,715/yr): -$143
  • Insurance ($1,800/yr): -$150
  • Mortgage P&I ($262,500 at 7.0%, 30-year): -$1,747
  • Net monthly cash flow: -$423

At 25% down and 7.0%, this property is modestly negative. At 30% down, the monthly loss narrows to approximately -$100. At 6.0% interest, the property reaches approximate breakeven with 25% down. Compared to Denver, where the same exercise produces -$900+/month losses, Colorado Springs is significantly more workable. The military tenant base also provides lower vacancy risk than civilian markets, potentially allowing a 3–4% vacancy assumption instead of 5%.

Colorado Springs vs. Denver: The Comparison

  • Median price: $420K vs. $587K (28% cheaper)
  • Gross yield:6–8% vs. 4–6%
  • Property tax rate: 0.49% vs. 0.51% (similar)
  • Tenant base: Military-heavy vs. tech/lifestyle
  • Appreciation potential: Moderate vs. moderate-to-strong
  • Hail risk: High (both markets)
  • Regulatory risk:Lower (no local rent restrictions) vs. higher (Denver's right-to-renew)

What to Watch Out For

  • Hail damage: Budget for rising insurance costs and potential roof replacements. Impact-resistant roofing is not optional in this market.
  • Military dependency: A BRAC (Base Realignment and Closure) event affecting Fort Carson, Peterson, or Schriever would devastate the local economy. While this is unlikely given recent Space Command confirmation, it is a concentration risk to acknowledge.
  • PCS turnover:Military tenants move every 2–3 years. Budget for higher turnover costs (cleaning, minor repairs, marketing) than you would in a civilian market.
  • Water supply: Colorado Springs, like much of the arid West, faces long-term water supply challenges. The city has invested heavily in the Southern Delivery System pipeline from Pueblo Reservoir, but water costs are rising and may affect long-term affordability.
  • Traffic and infrastructure: The I-25 corridor between Colorado Springs and Denver is increasingly congested. Infrastructure has not kept pace with population growth in some areas, particularly on the rapidly developing east and northeast sides.

Bottom Line: Is Colorado Springs Right for You?

Colorado Springs is an excellent market for investors seeking a balance of cash flow and appreciation in a growing Western metro. The military tenant base provides demand stability that few civilian markets can match. Prices are manageable, property taxes are low, and the regulatory environment is more landlord-friendly than Denver.

The ideal Colorado Springs investor is comfortable with military-tenant dynamics (higher turnover, BAH-sensitive pricing), willing to invest in hail-resistant properties, and looking for a market that offers better numbers than Denver without sacrificing the Colorado lifestyle premium. If you are a veteran or active-duty investor, Colorado Springs is particularly compelling — you understand the tenant base, you may qualify for VA loans, and the market aligns naturally with your knowledge and network.

Sources: U.S. Census Bureau Population Estimates Program (2024), Bureau of Labor Statistics LAUS (Q4 2025), Census American Community Survey 5-year estimates (2023), Zillow Home Value Index (2026), El Paso County Assessor, Defense Manpower Data Center, Department of Defense BAH Calculator (2026 rates), GreatSchools.org, National Association of Insurance Commissioners. All data is approximate and should be independently verified. Market conditions change; data referenced reflects late 2025/early 2026 conditions. This guide is for educational purposes only and does not constitute investment advice. See our full disclaimer.