Aurora, CO Cap Rate 2.38%
Aurora is the third-largest city in Colorado and the eastern anchor of the Denver metro — uniquely anchored by the Anschutz Medical Campus (one of the larger US academic medical complexes) and Buckley Space Force Base. Often misunderstood as just a Denver suburb, Aurora has more people than Atlanta, Pittsburgh, or Minneapolis proper. The 2.38% cap rate at a $565,000 median price keeps the 0.33% rent-to-price ratio close to functional than Denver proper. Population growth at 1.3%/yr is steady.
Employment is anchored by the Anschutz Medical Campus (the University of Colorado Anschutz Medical Campus plus Children's Hospital Colorado plus the UCHealth University of Colorado Hospital plus the Rocky Mountain VA Medical Center — collectively one of the larger US academic medical-and-research complexes, with continuing capacity expansion), Buckley Space Force Base (the Space Force's primary space-domain-awareness and missile-warning installation — formerly Buckley AFB, with the broader Department of Defense civilian and contractor workforce), the broader Denver metro commuter base (Aurora residents commute to Denver for the broader downtown professional employment), Children's Hospital Colorado (one of the larger US children's hospitals), the Town Center at Aurora retail district, the broader Arapahoe and Adams County governments. Submarkets stratify cleanly: the Southlands and broader southeast Aurora draw professional family rentals at premium pricing; the broader Cherry Creek school district zones are premium school-district draws; Aurora north (Adams County side) extends with cheaper basis; the Anschutz-adjacent zones draw medical-professional rentals.
Colorado property tax at 0.52% is moderate. Colorado state income tax is a flat ~4.4%. Insurance is reasonable but verify hail deductible structure (Front Range hail is meaningful). Colorado has shifted toward tenant-protective regulations in recent years (statewide rent-increase notice requirements, just-cause eviction in some jurisdictions) — operating in CO requires comfort with the regulatory framework. The structural advantages: Anschutz Medical Campus is genuinely durable healthcare-and-research employment with continuing federal funding; Buckley Space Force is structurally tied to expanding US space-domain investment; sustained Denver metro spillover; cost basis is materially below Denver proper. The structural risks: CO regulatory environment requires operator comfort; hail/severe-weather exposure; per-block variance in some Aurora submarkets. For investors who want Denver-metro exposure with genuinely diversified anchors and lower cost basis, Aurora is the most underrated CO metro option.
Market data powered by Zillow Home Value Index (ZHVI) and Zillow Observed Rent Index (ZORI) · Updated Feb 2026
Market Data
2026 Market Update: Aurora
Aurora's 0.3% rent-to-price ratio is well below the 1% rule. At median prices of $565,000, the $1,840/mo rent produces only $1,123/mo in NOI. Investors here need to target below-median properties or pursue value-add strategies to make the numbers work.
At current rates, a 20% down conventional loan ($113K at 7%) would result in approximately $-1,883/mo cash flow — negative at median prices. Larger down payments, seller financing, or buying 15–25% below median are strategies to turn the numbers positive.
The 25.6x gross rent multiplier and 5.2% vacancy rate position Aurora as a growth-dependent market. With annual appreciation at 2.5%, total returns (cash flow + equity growth) run approximately 4.9% before financing leverage.
Deal Modeling & Scenarios for Aurora
All figures below are computed from Aurora's real market medians. Use them as a baseline; override with property-specific numbers in the calculators.
Property Tax Bill in Real Dollars
At 0.52% effective rate on the $565,000 median price, the annual tax bill is $2,938 — that's very low (bottom 15% of US markets) (-51% vs the national average of ~1.06%). Verify the actual assessed value before purchase; sale-triggered reassessments can push the bill higher than the seller's current statement.
5-Year Cap Rate Trajectory
If Aurora continues appreciating at 2.5%/yr while rents grow at a conservative 3%/yr, cap rate holds roughly steady as price growth outpaces rent. Year-by-year projection at the median:
| Year | Est. Price | Est. Rent/Mo | Cap Rate |
|---|---|---|---|
| Today | $565K | $1,840 | 2.4% |
| Year 1 | $579K | $1,895 | 2.4% |
| Year 2 | $594K | $1,952 | 2.4% |
| Year 3 | $608K | $2,011 | 2.4% |
| Year 4 | $624K | $2,071 | 2.4% |
| Year 5 | $639K | $2,133 | 2.4% |
Three Financing Scenarios
Same median-priced Aurora property — different capital structures. All-cash maximizes cap rate. Leverage trades cash flow for higher cash-on-cash return when the spread between cap rate and borrowing cost is positive.
| Scenario | Cash Invested | Monthly Cash Flow | Annual CF | Cash-on-Cash |
|---|---|---|---|---|
| All cash | $565K | $1,123 | $13,474 | 2.4% |
| 20% down conventional @ 7% | $130K | $-1,883 | $-22,596 | -17.4% |
| 25% down DSCR @ 8.5% | $164K | $-2,136 | $-25,630 | -15.6% |
Three Price Tiers: Below, At, and Above the Median
Properties don't always trade at the median. Lower-priced units typically offer higher cap rates but harder operations; higher-priced properties tend to compress cap rates while attracting better tenants. All-cash assumptions below:
| Tier | Price | Rent/Mo | NOI/Yr | Cap Rate | Monthly CF |
|---|---|---|---|---|---|
| Below median (~75% price) | $424K | $1,564 | $10,891 | 2.6% | $908 |
| At median | $565K | $1,840 | $12,201 | 2.2% | $1,017 |
| Above median (~125% price) | $706K | $2,116 | $13,511 | 1.9% | $1,126 |
Total Return Over a 5-Year Hold
Cap rate is just one piece. Real estate returns come from four sources: cash flow, appreciation, principal paydown, and tax benefits. Assuming 20% down conventional financing at 7% and a 5-year hold at Aurora's historical appreciation rate of 2.5%:
On a $113K down payment, that's a -4.3% total ROI over 5 years (not annualized). Tax benefits from depreciation are additional and depend on your personal tax bracket.
Risk Flags Specific to Aurora
Automated checks against the underlying data — surface only the risks that actually apply to Aurora, not generic boilerplate:
Cap Rate Calculator — Aurora
Pre-filled with Aurora medians. Adjust to match a specific property.
Cash-on-Cash Return — Aurora
Factor in financing to see your actual return on invested capital in Aurora.
Is Aurora a Good Place to Invest in Rental Property?
Aurora, CO has a population of 395,690 and has been growing at 1.3% annually — above the national average, suggesting steady demand pressure on housing. The median home price of $565,000 paired with median rents of $1,840/mo produces an estimated cap rate of 2.38%.
Property taxes at 0.52% are well below the national average of ~1.1%, providing a meaningful cash flow advantage many investors overlook. The vacancy rate of 5.2% is moderate and within normal parameters for a healthy rental market.
At a price-to-income ratio of 9.0x, homes cost about 9.0 times the local median income of $62,800. This elevated ratio means homeownership is stretched, supporting rental demand but limiting buyer pools. Home values have appreciated at roughly 2.5% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: At current median prices, Aurora is challenging for pure cash flow investing. Consider BRRRR strategies with below-market purchases, or look at neighboring metros with stronger price-to-rent ratios.