Whether we’re talking about the Colorado Springs rental market or the sales market, a property’s value is based on what people are willing to pay to rent or buy it. The market is going to have more influence on your home’s value than anything else.
This doesn’t mean you can’t control what you earn on your property. You can.
Every buyer and renter is different. Some will put extra emphasis on location while others will look for a specific number of bedrooms or amenities like a fenced yard or attached two-car garage. Military tenants will want to be close to their base. Families with children will want to know they’re in a good school district.
Your home’s value is market-driven, but it also factors in a number of variable conditions that have an impact on what you can charge.
Our experience as Colorado Springs property managers and real estate experts has allowed us to pinpoint exactly where the difference is made when it comes to home values. We’ve chosen six specific factors that we know will influence what you can collect in rent and what you’ll be able to ask if you ever get to the point that you want to sell your property.
Successful real estate investing depends on understanding the local Colorado Springs rental market and how a particular investment property fits into that market. Let’s take a look at these six factors that influence what you can earn on your Colorado Springs investment property.
1. Location Always Impacts Colorado Springs Home Values
Just about everyone understands the importance of location when it comes to real estate. This is an extremely local industry, and the rental market responds similarly to the sales market when we’re talking about the location of a home. The neighborhood in which a property is located will always be one of the largest influences on property value and rental value.
Location drives appeal, and many people are searching for properties based on location. They get as specific as looking for listings in a set of zip codes that they’ve targeted as their most desirable areas to rent or buy. Your property’s location will be a driver in how much you can charge, how long of a vacancy period you must endure, and what types of tenants you’ll attract to your home.
What type of location attracts the best residents and the highest prices?
Good schools. Always check your school district. They tend to be zoned in ways that don’t always make sense. Your property could be assigned to a school that’s different from the properties just across the street.
Easy access to commuter routes. More people continue to work from home since the pandemic, but there are plenty of tenants who don’t have that option available to them. They won’t want to fight traffic or spend hours in the car, so homes that are close to employers and highways will usually have a higher value.
Proximity to shopping, dining, and entertainment. Homes that are more remote won’t have as high a value as homes that are close to all the things that contribute to a higher quality of life.
Spend some time learning about the Colorado Springs market before you attach a price. Home values will change from month to month and even from week to week. You need to stay up to date on how your neighborhood is performing.
2. Colorado Springs’s Rental Market Impacts Value
The current state of the local Colorado Springs real estate market will also influence a home’s value.
Right now, it’s a wild market that’s low on inventory and high on demand. That’s driving prices up. Home prices will always depend on supply and demand. If there are very few properties available on the market, the value of a rental home will go up. When competition is fierce and the market is flooded, prices for rental homes are going to drop.
This type of market activity fluctuates based on extremely local nuances, making Colorado Springs property management essential. You’ll want to have access to good data about the market. You’ll want to be prepared for the highs and the lows, and you’ll need to know how to raise your rent, negotiate your price, and offer other terms that may make your property more attractive in a crowded market.
Local economic and population shifts will also impact the way the market influences home values. Pay attention to demographics, employment conditions, and local real estate trends. If people are moving into the area, as they are now, you can expect your home value to rise.
3. Bedrooms, Bathrooms, and Square Footage
When it comes to selling or renting out a home, size does matter. It’s going to matter in different ways to different buyers and tenants, of course, but you will have to consider what your home offers before you price it. Not only will size impact your home value, the way the home is arranged will also make a difference. You could have a large five-bedroom house on two stories but if there’s only one bathroom, your home value may not be as high as a property with fewer bedrooms but an extra bathroom.
Many investors will establish their home’s value with a price-per-square-foot matrix. You’ll see that in a lot of listings. It does make sense in many ways, but such a calculation does not take into consideration market strength and property amenities and features. Don’t limit yourself to looking at that number.
Typically, larger homes will rent for higher prices, but there are not a lot of tenants looking to rent a 5,000 square-foot house with seven bedrooms. In Colorado Springs, the best rental values are found in three or four-bedroom homes with at least two full bathrooms and 1,500 to 1,800 square feet or more. This is a good spot to be in when you’re hoping to establish the highest rental values.
4. Property Condition and Age Impact Home Values in Colorado Springs
Newer and well-maintained homes always lead to higher values on both the rental and the sales market. A property that’s already in great condition will require less maintenance. You won’t have to spend much to get it listed on the market. They’re also more attractive to tenants and buyers who are looking for modern conveniences and upgrades. A home with energy efficient appliances and hard surface flooring, for example, will always earn more than a home with aging appliances and cheap carpet that’s been cleaned too many times. Consider making the necessary upgrades that will increase your home value. There’s no need to invest in a full renovation. Just make the place stand out with some fresh paint, new floors, and better lighting.
5. Appliances and Amenities
The special features included in your home will also impact value.
Homes that include a washer and dryer will see an increase in value. If there’s an outdoor space or even a private balcony or patio, the rental value of that property will go up. Good tenants are also looking for home security systems and smart technology. Parking is also likely to influence value. In single-family homes tenants will pay more for an attached garage, and in attached homes, they’ll want to see off-street parking in a lot, driveway, or dedicated space.
Buyers may be willing to pay more for a home in an HOA community that offers a pool, fitness center, clubhouse, and playgrounds.
6. Pet-Friendly Properties and Rental Value
Pet-friendly properties are essential to investors who want to earn as much as possible with their Colorado Springs rental home. You’ll be sure to attract a larger pool of tenants when you allow pets, and you’ll also find it’s easier to charge more in rent. Most tenants are willing to pay a pet rent every month, and you can collect a pet fee. Allowing pets also keeps vacancy to a minimum and increases response rates during the marketing period.
Pet fees are typically $200 or $300 per pet, and it’s always better to charge a pet fee instead of a pet deposit. A deposit needs to be refunded if it is not used. When a pet fee is collected at the beginning of the leasing period, it can be kept through and after the tenancy. Pet rent is typically between $25 and $50 per month, per pet.
When you want to increase the value of your rental home, one of the easiest things you can do is open it up to pets. With a strong pet policy in place, you’ll protect your investment against the potential risks that come with animals.
These are six of the factors that are weighed while establishing an accurate value for your home. Whether you’re selling or renting out an investment property, please contact us at Empower Realty Team when you need some help with pricing and navigating the entire process. We lease, manage, and maintain investment properties in Colorado Springs, Monument, Castle Rock, Parker, and Aurora. We’d love to talk more about your unique needs.