Pueblo is home to the best residential real estate investment market in Colorado.
The 81007 zip code in Pueblo presents the greatest opportunity for the best real estate investments among the 852 individual real estate markets in Colorado we evaluated. We looked at property values, population trends, and six other metrics for each market. We used that data to calculate each market's InvestScore.
5 best places to invest in Colorado
| Rank | City | InvestScore | Affordability | Property value appreciation |
|---|---|---|---|---|
| 1 | Pueblo | 100 | 4.4 | 50.45% |
| 2 | Craig | 99 | 4.4 | 61.60% |
| 3 | Grand Junction | 98.5 | 5.6 | 49.11% |
| 4 | Colorado Springs | 98.4 | 4.4 | 48.56% |
| 5 | La Junta | 98.1 | 2.9 | 56.71% |
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1. Pueblo
We've identified the 81007 zip code in Pueblo as Colorado's best real estate investment market. Here's why.
🔎 Key data about Pueblo
| Data point | Value | Rank in state (of 852 markets) |
|---|---|---|
| Zip code | 81007 | N/A |
| InvestScore | 100 | Highest |
| Typical property value | $395,975[1] | 35th lowest |
| Five-year appreciation | 50.45%[2] | 53rd highest |
| Household income | $89,530[3] | 100th highest |
| Affordability ratio | 4.4 | 12th most affordable |
| Five-year population growth | 11.1%[4] | 60th highest |
| Unemployment rate | 4.4%[5] | 111st lowest |
| Property taxes | $1,752[6] | 71st lowest |
| Educational attainment | 30.3%[7] | 156th highest |
Pueblo (zip code 81007) is the best residential real estate investment market in Colorado. It has the 53rd highest property value appreciation among markets we evaluated, with a 50.45% appreciation of the typical property over the last five years.
Pueblo is the 12th most affordable market among the 852 Colorado markets we evaluated, with an affordability ratio of 4.4.
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2. Craig
The 81625 zip code in Craig is the runner-up spot for the best real estate investments in Colorado.
🔎 Key data about Craig
| Data point | Value | Rank in state (of 852 markets) |
|---|---|---|
| Zip code | 81625 | N/A |
| InvestScore | 99 | 2nd highest |
| Typical property value | $282,845[8] | 10th lowest |
| Five-year appreciation | 61.60%[9] | 22nd highest |
| Household income | $64,900[10] | 177th highest |
| Affordability ratio | 4.4 | 8th most affordable |
| Five-year population growth | 0.4%[11] | 146th highest |
| Unemployment rate | 4.4%[12] | 111st lowest |
| Property taxes | $1,096[13] | 26th lowest |
| Educational attainment | 20.5%[14] | 186th highest |
The 81625 zip code in Craig features a typical property value of $282,845, the 10th lowest in the state.
Property values have appreciated 61.60% over the past five years, the 22nd highest increase among evaluated markets in the state. Craig homes have an affordability ratio of 4.4, the 8th most affordable in the state.
3. Grand Junction
The 81505 zip code in Grand Junction comes in at No. 3 in our ranking of the best residential real estate investment markets in Colorado.
🔎 Key data about Grand Junction
| Data point | Value | Rank in state (of 852 markets) |
|---|---|---|
| Zip code | 81505 | N/A |
| InvestScore | 98.5 | 3rd highest |
| Typical property value | $459,629[15] | 64th lowest |
| Five-year appreciation | 49.11%[16] | 61st highest |
| Household income | $82,731[17] | 122nd highest |
| Affordability ratio | 5.6 | 79th most affordable |
| Five-year population growth | 25.6%[18] | 24th highest |
| Unemployment rate | 1.2%[19] | 4th lowest |
| Property taxes | $1,545[20] | 59th lowest |
| Educational attainment | 40.2%[21] | 118th highest |
With a typical property value of $459,629, Grand Junction's 81505 zip code features the 64th lowest property values in the state.
Grand Junction homes have an affordability ratio of 5.6, the 79th most affordable among the markets we evaluated.
4. Colorado Springs
The 80922 zip code in Colorado Springs ranks No. 4 among Colorado's residential real estate investment markets.
🔎 Key data about Colorado Springs
| Data point | Value | Rank in state (of 852 markets) |
|---|---|---|
| Zip code | 80922 | N/A |
| InvestScore | 98.4 | 4th highest |
| Typical property value | $454,252[22] | 61st lowest |
| Five-year appreciation | 48.56%[23] | 64th highest |
| Household income | $102,807[24] | 64th highest |
| Affordability ratio | 4.4 | 11th most affordable |
| Five-year population growth | 4.4%[25] | 100th highest |
| Unemployment rate | 4.3%[26] | 105th lowest |
| Property taxes | $1,386[27] | 44th lowest |
| Educational attainment | 41.1%[28] | 110th highest |
Property values in Colorado Springs's 80922 zip code have seen the 64th highest increase among evaluated markets in the state, with an appreciation of 48.56% over the past five years.
Colorado Springs's affordability ratio of 4.4 makes it the 11th most affordable among the 852 markets we evaluated.
5. La Junta
The 81050 zip code in La Junta rounds out our top five residential real estate investment markets in Colorado.
🔎 Key data about La Junta
| Data point | Value | Rank in state (of 852 markets) |
|---|---|---|
| Zip code | 81050 | N/A |
| InvestScore | 98.1 | 5th highest |
| Typical property value | $149,072[29] | 2nd lowest |
| Five-year appreciation | 56.71%[30] | 38th highest |
| Household income | $52,195[31] | 38th highest |
| Affordability ratio | 2.9 | most affordable |
| Five-year population growth | 5.9%[32] | 91st highest |
| Unemployment rate | 5.9%[33] | 172nd lowest |
| Property taxes | $511[34] | 3rd lowest |
| Educational attainment | 19.1%[35] | 192nd highest |
Property values in La Junta's 81050 zip code rose 56.71% over the last five years, ranking the city 38th highest among evaluated markets in Colorado.
La Junta homes have an affordability ratio of 2.9, the most affordable among the markets we evaluated.
Investing in residential real estate can be one of the best passive real estate investments in Colorado.
Residential real estate offers accessible passive income and the potential to compound your original investment.
Renting out residential units is the top way to invest in real estate. House hacking also offers a great opportunity for passive real estate investment income.
How we rank residential real estate markets in Colorado
To determine the best real estate investments in Colorado we evaluated 852 markets on eight metrics, and then assigned an InvestScore based on their weighted and combined rankings. Each market corresponds to a specific zip code in Colorado.
What is InvestScore?
InvestScore is a score on a scale of 0 (worst in state) to 100 (best in state) that estimates the residential real estate investment potential of a given market. It takes into account a suite of key data points for each city.
- Typical property value: This measures the typical home value in this zip code, according to the Zillow Home Value Index. It reflects the typical value for homes in the 35th to 65th percentile range, including all homes, with the numbers smoothed and seasonally adjusted. We prefer lower property values, which indicate both more room for growth and a greater ease of purchase. We assign a weight of 20% to typical property values.
- Property value appreciation: This measures how much property values have increased in the area over the past five years, according to the Zillow Home Value Index. We prefer a higher appreciation, as it indicates better returns on housing. However, past performance isn't indicative of future results. We assign a weight of 20% to property value appreciation.
- Median household income: This is the inflation-adjusted median household income in the zip code, according to U.S. Census American Community Survey data. We prefer a higher household income, as it indicates local residents have more income to spend on housing. We assign a weight of 10% to median household income.
- Affordability ratio: This is the ratio of the typical home value to the median household income in the area. A lower ratio is better because it means more households can afford a home, which indicates higher demand. We assign a weight of 15% to the affordability ratio.
- Population growth: This is how much the area's population has grown over the past five years, according to U.S. Census estimates. Higher is better, as it indicates residents are moving into the area at a rapid clip. We assign a weight of 10% to population growth.
- Unemployment rate: This is the unemployment rate in the area, according to U.S. Census data. We prefer a lower rate, as it indicates the availability of steady employment in the area, meaning residents will find it much easier to afford homes. We assign a weight of 15% to unemployment rate.
- Property tax: This is the median real estate property tax paid in the area, according to U.S. Census estimates. We assign a weight of 10% to property tax.
- Educational attainment: This is the percentage of residents in the area that have obtained a bachelor's degree or better, according to U.S. Census estimates. We prefer a higher rate because it indicates local residents who have higher earning potential and thus should be able to afford homes. We assign a weight of 15% to educational attainment.
🚨 Disclaimer: The information contained in this article isn't intended as, and shall not be understood or constituted as, financial advice. The information in this article isn't a substitute for financial advice from an investment professional or real estate agent who is aware of the facts and circumstances of your financial situation or the specifics of any individual property.
