El Paso County, CO Investment Property Analysis

The Honest Thesis

El Paso County sits at the intersection of three investor profiles: cash-flow buyer, appreciation buyer, and value-add operator. The 4.68% gross yield and 21.4x price-to-rent ratio place this market in workable cash-flow territory for Colorado, though not at the level of a pure Midwest cash-flow market. Compare that to Denver and Boulder, where price-to-rent ratios compress yields below 3%, and the math in Colorado Springs reads more favorably for income investors.

The 2025 correction sharpened the thesis further. The full-year 2025 median sale price came in at about $469,350, a 5.2% decline from the prior year. The Zillow ZHVI as of mid-2026 stands at $455,749, down 1.72% year-over-year. Average days on market climbed to 57 days in 2025, up from 12 days at the 2021 peak. Active listings hit 4,336 in July 2025, the highest level in five years. Entry-point conditions are as favorable as they have been in years, and the buyer is now negotiating from a position of strength.

The caveat: below-average local wages ($1,369 per week versus the national average of $1,589) constrain rent ceilings and purchasing power among renters. Gross yield looks cleaner before you model management costs, vacancy, and the financing rate. This is a market to buy carefully and underwrite conservatively, not one to stretch for.

Demand Drivers

Military Anchoring

The single most durable demand driver here is the military installation cluster. Fort Carson, Peterson Space Force Base, Schriever Space Force Base, and the U.S. Air Force Academy collectively produce a renter base that is federally funded, rotates on assignment cycles, and is BAH-eligible. El Paso County's share of Gulf War (2001 and later) veterans runs 2.49 times higher than comparable geographies. BAH-eligible servicemembers are effectively demand that persists regardless of local economic conditions.

Civilian Employment Base

The county employed about 350,000 people in 2024, up 1.04% from 346,000 in 2023. Health Care and Social Assistance leads at 48,597 workers, followed by Retail Trade at 38,787 and Professional, Scientific and Technical Services at 37,383. The spread across healthcare, retail, and professional services limits single-employer concentration risk. No one business closing triggers a wave of vacancies. That matters for a buy-and-hold investor underwriting a 10-year hold.

Rental Market Conditions

Multifamily occupancy across Colorado Springs sits at 90.7% as of Q3 2025, per MMG Real Estate Advisors. Average multifamily rent was $1,448 at that point, while the ZORI for the broader county reads $1,777 per month. New construction is slowing as fewer units move through the pipeline, which sets up a tightening dynamic over the medium term.

Housing priced under $300,000 remains in chronic short supply. That chronic undersupply anchors workforce-housing rental demand and limits the number of renters who can exit to homeownership. Housing costs in Colorado Springs have risen 82.6% over the last decade while wage growth has lagged, per the Common Sense Institute. Renters who cannot afford to buy stay renters. That is a structural support for occupancy.

Underwriting Considerations

Property Taxes

The effective property tax rate in El Paso County is 0.43%, less than half the national median of 0.89%. At a $455,749 purchase price, that differential saves about $2,100 per year in taxes compared to a national-median-rate market, which flows directly to net operating income. The 2026 residential assessment rate is set at 6.8% of actual value, with reassessments running on a biennial cycle using a data-gathering period of January 1, 2023 through June 30, 2024. Buyers acquiring today above the current assessment base should model a future reassessment that closes that gap.

Flood Insurance

A preliminary FEMA map update showed a net decrease in flood-risk areas across El Paso County, driven by stormwater management improvements along the I-25 corridor and the Manitou Bypass. Mandatory flood insurance requirements are declining for a real share of county properties. Specific elevated-risk pockets remain near East Las Vegas Street and Hancock Drive, and properties along waterways remain in the highest tier. Parcel-level flood zone verification is still required before closing.

ADU Rules

Colorado HB24-1152, signed in May 2024, mandates that municipalities allow at least one ADU on any single-family lot by June 30, 2025. Within the City of Colorado Springs, the ordinance requires one off-street parking space per ADU, bans ADUs in Wildland-Urban Interface zones, and prohibits short-term rentals on any parcel that carries an ADU. Investors cannot run both an ADU and a short-term rental on the same property; the two strategies are mutually exclusive here.

In unincorporated El Paso County, the applicability of HB24-1152 is legally unresolved as of early 2026. Older family-occupancy restrictions may still apply to some parcels. Any investor targeting unincorporated county land for an ADU play needs parcel-level zoning due diligence before underwriting ADU income.

Neighborhood Analysis

Briargate

In February 2025, Briargate posted a median sale price of $545,000, up 9% year-over-year, with homes averaging 47 days on market and selling about 1% below asking. This is the upper tier of the Colorado Springs market: appreciation-driven, higher-income tenant base, longer hold period required to absorb acquisition costs. Cash-flow buyers will find the yield math tighter here. Appreciation buyers willing to hold 7 or more years have a track record of price growth to point to.

Broadmoor

The Broadmoor area reached a median of $528,000 in February 2025, up 20% year-over-year. Average time on market ran 1 to 2 months. That appreciation rate is exceptional, but the base price and slower absorption demand a longer investment horizon. Broadmoor is a lifestyle-and-appreciation play, not a cash-flow entry point.

Where to Buy by Investor Profile

Cash-Flow Buyer

Target workforce-housing product priced at or below the county median ($455,749). The chronic undersupply below $300,000 means that lower-priced rentals carry lower vacancy risk and command stable demand from renters priced out of ownership. The 4.68% gross yield at median price is a starting point; acquiring below median improves the yield before you factor in the 0.43% tax advantage. Focus on properties within the City of Colorado Springs, where ADU rules are at least resolved, even if the STR restriction limits upside optionality.

Appreciation Buyer

Briargate and Broadmoor represent the clearest appreciation sub-markets in the brief, with 9% and 20% year-over-year price growth respectively in early 2025. Underwrite to longer days-on-market (47 days in Briargate, 1 to 2 months in Broadmoor) when modeling hold costs. The trade-off is a higher entry price and a thinner income return while holding. Military installation proximity remains a durable demand floor even in higher-priced segments.

Value-Add Operator

The ADU mandate creates the clearest value-add opportunity in this market for properties inside Colorado Springs city limits. Buying a single-family lot that can support a detached ADU and converting to a two-income property is now legally accessible under HB24-1152, with the key constraint being the STR prohibition and the WUI zone exclusion. Operators who want to add income without a full multifamily acquisition have a scalable strategy here. Unincorporated county parcels require parcel-level due diligence before underwriting this strategy.

Where the Puck Is Going

The new construction slowdown in multifamily, combined with a 90.7% occupancy rate, points toward rent growth in the medium term as fewer units enter the pipeline. The inventory correction of 2025 appears to be stabilizing: active listings peaked at 4,336 in July 2025, but by June 2026 inventory held flat year-over-year for two consecutive months. That pattern is consistent with a market recalibrating rather than entering a sustained decline.

The ADU ordinance is less than two years old, and its implementation in unincorporated county areas remains unresolved. As jurisdiction questions get adjudicated, the pool of ADU-eligible parcels will expand, creating additional value-add opportunities for operators who track the regulatory calendar.

Transit will not be a catalyst here. Colorado Springs runs 34 bus routes with about 3.14 million annual riders and no light rail, with no near-term rail investment planned. The I-25 corridor is the relevant accessibility axis; transit-proximity premiums are not a factor to underwrite.

Model your specific deal with our investment property calculator to stress-test your acquisition price, rent assumptions, and tax scenario against the market data above.