Why Fort Collins is Attractive for Investors
Fort Collins, Colorado has established itself as one of the best long-term real estate markets in the U.S. Even though Fort Collins boasts some of the highest housing prices in the country, they pale in comparison to nearby Colorado cities like Denver.
The Fort Collins real estate market has become competitive. Sellers have been receiving multiple offers, and Fort Collins homes sell after being on the market about 29 days. The average sale price of a single family home in FoCo came in around $527,000 in August – an increase of 4.4% YOY, according to data from Redfin.
Is Fort Collins, Colorado a Good Real Estate Investment?
Data from NeighborhoodScout shows that real estate in Fort Collins has appreciated by 93.87% over the past decade – an annual appreciation rate of 6.84%, slightly above the national average.
That is a healthy appreciation rate over the past 10 years, but Fort Collins’ appreciation rates last year lagged slightly behind the rest of the nation, hitting just 6.79% when the national average rose to 15% or more.
It will be important to watch what happens to the home prices in Fort Collins as prices peak or even drift lower in some markets over the second half of 2022.
The numbers indicate that the Fort Collins market wasn’t as overheated as others, which may mean prices are more stable there in the coming year.
Rents are also on the rise in the Fort Collins housing market. Over the past month, the average rent for a studio apartment increased 11% to $1,195. Rent for one-bedroom apartments increased 16% to $1,499 while rent for two-bedroom apartments increased 3% to $1,695.
Overall, this growing real estate market located just an hour north of Denver paints a picture of opportunity for real estate investors regardless of their investment strategy. Because nearly half of the population rents, investors can expect continued demand for rental properties.
With housing demand high and rents rising, single-family, new construction, and multifamily investing could yield high profits for real estate investors.
Investing in Build to Rent is Booming
Rental properties are nothing new in Fort Collins. Some neighborhoods have organically become predominantly rentals – especially around the Colorado State University campus.
In response, some investors have turned to build to rent investment properties. These new construction projects are built with the purpose of becoming long-term and short-term rental investment properties have become more popular in Fort Collins over the past couple of years as renters desired more space during the pandemic.
The booming economy in the area is a driving force behind the city’s rental market growth. Fort Collins’ economy is a mixture of manufacturing and service-related businesses. High-tech companies have relocated to Fort Collins because of Colorado State University and its research facilities.
Many breweries and distilleries also call FoCo home, making the city a great place to both work and play- and attractive to many.
This blend of innovative manufacturing and high-tech firms, research facilities, start-ups, and a first-rate research university combine to make Fort Collins, Colorado one of the nation’s most innovative and entrepreneurial communities—providing a solid base of qualified tenants for rental investors.
Of course, a low unemployment rate helps to make Fort Collins attractive to people and businesses interested in relocating to the area. The city’s unemployment rate has rebounded well post-COVID, dropping to 2.9% in July 2022—well below the national average.
An Investor’s Guide to Fort Collins
The Fort Collins, Colorado real estate market has seen steady appreciation because the population itself is growing slowly but steadily. From 2021 to 2022, the area’s population saw an increase of 1.75%. Of course, as more people relocate to the area, the need for housing increases. Again, this is a strong sign for Fort Collins real estate investment and a good rental market to invest in.
When it’s time to finance your next real estate investment, don’t partner with just any hard money lender. Let Lima One, the nation’s premier private lender, help you get the funding you need.
Our multifamily loans and build to rent loans are second to none, and our lending options are designed to cater to our client’s individual investment needs.