Updated 2026 · Based on median market data for Colorado Springs, CO
Colorado Springs is the second-largest city in Colorado, sits about seventy miles south of Denver at the base of Pikes Peak, and runs on an economic base that is more concentrated in defense and military activity than any major Mountain West metro. The United States Air Force Academy occupies thousands of acres on the city's north end. Fort Carson, the army installation that anchors the south end, employs tens of thousands. Peterson Space Force Base, Schriever Space Force Base, and the headquarters operations of various space and missile defense commands round out a defense footprint that touches roughly a third of the regional economy directly or indirectly. Median price near $450,000 and median rent of $1,690 produce a gross rent multiplier of 22.2 and a cap rate of 3.01%. Recent appreciation of 2.70% reflects continued in-migration and the structural BAH-driven rental demand. The investor opportunity here is genuinely different from Denver, Fort Collins, or Boulder because the underlying tenant base behaves differently from civilian-only markets. Understanding the BAH structure, the deployment cycles, and the geographic pull of each base is the foundational analytical work for the metro.
Old Colorado City is the historic urban core, a Wild West-era commercial district immediately west of downtown that has been progressively gentrified over the past two decades, with brick storefronts, small-multi-family stock, and converted Victorians. Manitou Springs, sitting at the base of Pikes Peak just west of the city, is its own incorporated municipality with a tourism-driven economy and a distinct identity. Black Forest is the high-end exurban submarket north of the city, with large-lot equestrian properties that command premium pricing. Briargate is the master-planned northern Colorado Springs suburbia, with newer tract product and proximity to the Air Force Academy. Powers, the broad geography along Powers Boulevard on the east side, encompasses much of the post-1990 tract development and houses substantial Fort Carson and Peterson-adjacent rental demand. The Fountain Valley, sitting south of the city along the Fountain Creek corridor, includes the city of Fountain itself and Security-Widefield, both of which serve as workforce-housing geography for Fort Carson personnel. The Cheyenne Mountain area, west and south, includes the older affluent neighborhoods that surround the Broadmoor resort. Downtown proper has been incrementally revitalizing over the past decade with mixed-use infill and the Olympic Museum.
The Basic Allowance for Housing (BAH) is a tax-free housing allowance that the Department of Defense pays to service members based on rank, dependent status, and zip code, calibrated annually to local rental market conditions. For Colorado Springs, BAH rates vary across multiple zip-code-based zones and run from roughly $1,500 per month for junior enlisted with no dependents to over $3,500 per month for senior officers with dependents. The structural implication for investors is that a meaningful share of the metro's rental tenant base has a defined, government-backed monthly housing budget that tracks the local market with a calibration delay. Properties priced at or near the BAH for the relevant rank cohort lease quickly to military tenants. Properties priced above BAH lease more slowly. Properties priced significantly below BAH attract higher-rank service members who pocket the difference. The interaction between BAH and the rental market is the central operational dynamic of Colorado Springs investing, and out-of-state investors who do not understand it consistently misprice their rentals. Median household income near $72,400 reflects the broader metro economy including the substantial military-spouse civilian employment. The BAH increase in any given year functions as a regional rent floor that lifts pricing across military-adjacent submarkets.
Fort Carson, sitting south of the city, employs roughly twenty-five thousand active-duty soldiers plus thousands of civilian and contractor staff. The base hosts the 4th Infantry Division and a rotating schedule of brigade combat teams. The Mountain Post is one of the most active deployment-cycle bases in the army. Investor implications: tenant turnover follows the deployment and PCS (permanent change of station) cycle, with concentrated move-in periods around late spring and early summer as units rotate. Lease-break clauses for military deployment are standard and protected under the Servicemembers Civil Relief Act, which limits operator flexibility on early termination penalties. The Fort Carson workforce-housing submarket centers on Fountain, Security-Widefield, and the southern Powers corridor, where 1980s-2000s tract product fills the BAH-anchored rental demand. Pricing in these submarkets tracks BAH closely. The thinner premium market, where higher-rank officers and senior NCOs lease, extends into the southern parts of Briargate and into the Broadmoor-adjacent neighborhoods on the west side. Operators who specialize in military rentals build relationships with the on-base housing referral office and can fill vacancies rapidly during PCS season.
The United States Air Force Academy occupies about eighteen thousand acres on the north end of Colorado Springs, with a permanent staff of roughly two thousand active-duty officers and enlisted personnel plus civilian employees, and a cadet population of around four thousand. The Academy itself is residential for cadets, but the staff who run it generate rental demand in Briargate, Black Forest, the Flying Horse master-planned community, and the older Air Force Academy-adjacent neighborhoods on the north side. Peterson Space Force Base, sitting east of the city near the airport, and Schriever Space Force Base, sitting further east in the plains, anchor the space and missile defense workforce. The combined Peterson-Schriever workforce concentrates rental demand in Powers, Briargate, and the eastern parts of Old Colorado City. Space Force, the newest service branch, has been growing in headcount through the past several years, and the question of whether US Space Command will permanently locate its headquarters in Colorado Springs (the Trump-era decision to move it to Huntsville was reversed by the Biden administration in 2023) remains a meaningful medium-term swing factor for the metro economy. Investors should not underwrite to either outcome with high confidence.
Colorado Springs is one of the better cash-flow opportunities among Front Range markets, partly because BAH provides a rental-rate floor that protects yields and partly because pricing has not run up as aggressively as Denver or Fort Collins. The Powers corridor offers 1990s-2000s tract product that pencils for SFR investors targeting Fort Carson and Peterson tenants. Fountain and Security-Widefield, sitting south of the city, offer entry-level pricing on tract homes that lease quickly to junior enlisted and military-adjacent civilian tenants. Older neighborhoods near Old Colorado City and along the West Colorado Avenue corridor offer small multi-family and converted Victorian product that works as value-add deals. The submarkets that essentially do not pencil at retail acquisition: Black Forest, Flying Horse, the Broadmoor-adjacent neighborhoods, the upper Briargate master-planned communities, and the high-end Manitou Springs tourism-driven properties. Cap rates of 3.01% on average leave room for workforce-submarket deals to clear at workable yields. Selected workforce submarkets, particularly south of the city in Fountain and Security-Widefield, meet the one-percent rent-to-price screen.
Colorado Springs has been the headquarters city of multiple major evangelical Christian organizations since the late twentieth century, including Focus on the Family, Compassion International, the International Bible Society, and the headquarters of several large megachurch networks. New Life Church, Woodmen Valley Chapel, and several other large congregations form a meaningful cultural and economic layer beyond the military base. This evangelical layer interacts with the housing market in specific ways: a meaningful population of religious-organization staff and families forms a stable, family-oriented rental and homeownership demand cohort, often with multi-child households that prefer larger SFR product in the Briargate and northeast geographies. Tourism to ministry headquarters and to evangelical conferences generates a steady-state hospitality demand layer. The cultural and political identity of the metro skews more conservative than Denver or Fort Collins, which affects everything from school district preferences to municipal regulatory tone. Investors do not need to share or understand the religious culture to operate here, but they should understand that the metro's tenant demand has a distinctive evangelical-family cohort that other Front Range cities do not.
Pikes Peak, the 14,115-foot mountain that dominates the city's western skyline, anchors a tourism economy that includes the Pikes Peak Cog Railway, the Pikes Peak Highway, the Cheyenne Mountain Zoo, the Garden of the Gods, the Olympic Training Center and the Olympic and Paralympic Museum downtown, and a steady stream of national-park-route tourists passing through on the way to Royal Gorge or to Rocky Mountain National Park. Manitou Springs, sitting at the base of the Pikes Peak Cog Railway, is the tourism-residential interface and runs a distinctive small-town economy that overlaps with but is separate from the larger Colorado Springs market. Manitou's STR market is meaningful and regulated, with the city of Manitou Springs operating its own permitting and concentration-cap regime. Colorado Springs proper has STR regulations that have evolved over the past several years and currently limit operations in residential zones to non-owner-occupied properties under specified conditions. The tourism-driven STR opportunity in the metro is real but constrained, and operators should not assume current rules will hold indefinitely. The Garden of the Gods area and the western foothills offer the most STR-aligned product but at premium pricing.
Take a hypothetical Powers corridor three-bedroom 1990s tract home priced at $396,000 that needs $12,000 of cosmetic refresh to rent at top of market. Rent post-rehab is $2,150, calibrated to the relevant Fort Carson BAH cohort. Annual gross rent is $25,800. Subtract 6% vacancy (lower than civilian-only markets because of the BAH-anchored absorption), Colorado property tax at the effective rate of 0.00% ($1,940), insurance of $1,800 (rising fast in Colorado due to wildfire and hail risk), water/sewer/trash you cover at $900, maintenance reserve of $1,800, capital reserve of $2,200, and 9% management. NOI lands around $12,884. Cap rate on all-in cost is 3.32%. With 25% down at current rates, debt service consumes most of NOI, with modest positive cash flow remainder if operations stay clean and BAH calibration remains steady. Price-to-income of 6.2x is moderate by Mountain West standards. The thesis combines BAH-anchored rent stability, structural population growth driven by the bases, and the steady-state appreciation that has tracked Front Range averages over long horizons.
Colorado Springs has been at the center of multiple significant wildfire events since 2012. The Waldo Canyon Fire of 2012 burned roughly eighteen thousand acres in the foothills west of the city, destroyed nearly 350 homes in the Mountain Shadows neighborhood, and reshaped the regional conversation about wildland-urban interface fire risk. The Black Forest Fire of 2013 was the most destructive in Colorado history at the time, destroying nearly 500 homes in the Black Forest exurban geography. The Marshall Fire of late 2021, while not in El Paso County, reshaped the broader Front Range conversation about wildfire risk on the plains and drove a wave of insurance non-renewals across Colorado. Properties on the western edge of the metro near the foothills, in the Black Forest exurban geography, and in Manitou Springs face elevated wildfire risk and rising insurance premiums. Hailstorms hit the Front Range with regularity, and Colorado Springs has had multiple billion-dollar hail events over the past decade. Drought cycles affect the region in ways that compound across multiple years, and Colorado Springs Utilities has had to make significant infrastructure investments to maintain supply. The climate reality is now a meaningful underwriting layer that did not warrant the same attention a decade ago.
Mistake one: ignoring BAH. Operators who do not calibrate rents to the relevant BAH cohort either lease slowly or leave money on the table. Mistake two: assuming military leases will run their full term. Deployment, PCS, and SCRA-protected early termination are real operational realities. Build them into vacancy assumptions. Mistake three: underestimating insurance. Front Range hail and Colorado Springs wildfire have driven insurance premiums up significantly since 2018, and several carriers have stopped writing new policies in higher-risk zip codes. Build $300 to $500 per month into your operating budget on an SFR. Mistake four: assuming the Space Command headquarters question is settled. The headquarters location decision has bounced between political administrations, and the medium-term outcome remains uncertain enough that investors should not underwrite either resolution with high confidence. Mistake five: misunderstanding the Powers-Briargate-Old Colorado City submarket distinctions. They serve different tenant cohorts and price differently. Mistake six: buying STR properties expecting unrestricted operation. Both Colorado Springs and Manitou Springs have evolving rules. Mistake seven: ignoring the Marshall Fire effect on insurance availability across all of the Front Range, including El Paso County. Mistake eight: skipping the foundation inspection on properties with Pierre shale or expansive soils, which are present across substantial portions of the metro and cause structural issues over time.
Colorado Springs is the right market for an investor who values structural rental demand stability over speculative appreciation, who is comfortable understanding and operating around BAH-driven workforce rentals, and who has the underwriting discipline to handle wildfire and hail insurance reality. The military anchors (Fort Carson, the Air Force Academy, Peterson Space Force Base, Schriever Space Force Base) provide a recession-resistant tenant base that Denver and Fort Collins cannot match. The evangelical-organization layer adds family-oriented rental and homeownership demand that distinguishes the metro from peer Front Range cities. The tourism economy provides a secondary demand layer. Property taxes around 0.00% are among the lowest in the country and a meaningful underwriting tailwind. Colorado's TABOR law and the Gallagher repeal continue to favor residential property owners. It is not the right market for investors who require institutional-quality stabilized stock at scale, for those uncomfortable with military-tenant operational realities, or for buyers who underestimate the wildfire and insurance trajectory. Colorado Springs rewards operators who understand BAH, who calibrate to the deployment cycle, and who treat the Space Command headquarters question as a known unknown rather than a settled outcome. The metro's quiet steadiness is precisely why some operators continue compounding capital here while their peers chase Denver appreciation.
Colorado Springs vs Colorado state average and national average across key investment metrics. Colorado Springs's cap rate is below both benchmarks — deal sourcing is critical here.