Colorado Springs Real Estate Investment Guide For 2026

Base closure risk is the primary concern for Colorado Springs investors and must be addressed seriously:

• BRAC history: Colorado Springs has never had a major installation close or meaningfully downsize through any Base Realignment and Closure (BRAC) cycle. In fact, Colorado Springs has consistently gained mission assignments in every BRAC since 1988.
• Space Force consolidation: The creation of the U.S. Space Force in 2019 with its primary operational hub in Colorado Springs significantly increased the strategic importance of the installations here. This makes the city more secure against base closure than at any previous point in its history.
• Five installation diversification: Even if one installation were to downsize, four others would continue operating independently. The probability of all five simultaneously downsizing is essentially negligible given current U.S. defense posture.
• Civilian economy growth: Colorado Springs’ civilian economy has diversified significantly since 2015. Tech, healthcare, and tourism now represent meaningful demand independent of the military. A base downsize would cause a market correction but not a collapse as it might have in 1995.
• Bottom line: Base closure risk in Colorado Springs is lower today than at any point in modern history. However, investors should not invest entirely on the military thesis without acknowledging that the civilian economy needs to continue developing. Properties that would perform adequately on civilian demand alone but excel with military demand are the most risk-managed approach.

The VA loan sequential strategy is one of the most effective wealth-building approaches for active duty military investors:

• Step 1: Use VA entitlement to purchase a property near your current duty station with 0% down. Owner-occupy it as your primary residence (required for VA loans).
• Step 2: When you receive PCS orders, invoke your SCRA early termination rights on any lease you’re in, and retain the purchased property as a rental. VA loan terms do not require continued owner-occupancy after the initial period.
• Step 3: At your new duty station, use remaining VA entitlement (or restored entitlement if the first property is refinanced conventionally) to purchase another property near the new base. Owner-occupy and repeat.
• Colorado Springs application: An E-7 purchasing a $380,000 home near Fort Carson at 0% down saves approximately $95,000 in down payment capital versus conventional financing. After 2 to 4 years and a PCS move, that property converts to a rental at Security/Widefield rates, generating cash flow while the soldier continues building the portfolio at the next base.
• Tax consideration: The property will qualify for capital gains exclusion if sold within a reasonable period of primary residence, even after converting to a rental, under military-specific IRS provisions. Consult a military-savvy CPA for current rules.

Garden of the Gods and Manitou Springs represent a very different STR model than Colorado’s ski resort markets:

• Demand pattern: Ski resorts peak in winter and have moderate summer shoulder seasons. Garden of the Gods peaks in summer (June to August) and has a meaningful fall shoulder season with spring being the weak period. This inverse seasonality means they are not substitutes in a portfolio context.
• Visitor volume: Garden of the Gods attracts 3.7 million annual visitors, more than Breckenridge’s ski area. This generates substantial STR demand but the visitors spend differently: shorter stays (1 to 2 nights) versus ski resort stays (3 to 7 nights).
• Entry cost: A Manitou Springs or Old Colorado City STR property costs $380,000 to $700,000. A comparable Breckenridge ski condo starts at $600,000 to $2M+. The Garden of the Gods market offers dramatically lower capital requirements with solid STR yield potential.
• STR regulation: Colorado Springs and El Paso County STR regulations are more permissive than Summit County ski town regulations, which have been tightening significantly to address housing affordability for workers.
• Year-round viability: The combination of Garden of the Gods tourism, Pikes Peak traffic, and proximity to downtown Colorado Springs creates more diverse demand than a purely ski-season resort market. Occupancy averages of 55 to 70% annually are achievable without winter ski demand.

Expansive soils (bentonite clay) are a significant and underappreciated due diligence issue for Colorado Springs investors:

• What it is: Bentonite clay soils expand when wet and contract when dry. In Colorado Springs, these soils are prevalent in east, southeast, and parts of south Colorado Springs. The cyclical expansion and contraction causes foundation movement, leading to cracks, door frame distortion, and in severe cases, structural damage.
• Geographic distribution: Generally, western Colorado Springs and Northgate areas have better soil conditions. East Colorado Springs, Powers Corridor south, and Security/Widefield areas have higher bentonite clay concentrations.
• Impact on investment: Properties with existing foundation issues can be purchased at discounts but require careful evaluation of remediation costs. Foundation repairs in bentonite clay areas can run $15,000 to $60,000+. New construction in high-risk zones typically uses engineered foundations or soil mitigation that adds $20,000 to $50,000 to build costs.
• Due diligence: Request a soils report for any purchase in east or southeast Colorado Springs. Include a structural engineer in your inspection team if the general inspector notes any foundation concerns. Never skip this step to save $500 on an inspection when the repair liability can be 100 times that amount.
• Disclosure: Colorado requires sellers to disclose known expansive soil conditions. However, many problems only become apparent after a wet cycle, so prior seller disclosure is not a substitute for your own engineering review.

Ivywild and downtown Colorado Springs represent the city’s emerging urban investment story:

• Ivywild: A historic south-central Colorado Springs neighborhood centered on the Ivywild School community development (a converted 1920s school now housing restaurants, a brewery, and retail). Ivywild is experiencing genuine gentrification with improving demographic trends, new restaurant investment, and growing young professional appeal. Entry prices of $350,000 to $550,000 represent early-stage positioning for a neighborhood trajectory that mirrors what Old Colorado City looked like in 2012.
• Downtown Tejon Street: Colorado Springs’ downtown has been investing significantly in public space, arts, and restaurant development since 2018. New loft developments, the Colorado Springs Philharmonic, and an emerging bar and restaurant district on Tejon Street are attracting young professionals who previously would not have considered living downtown. The urban condo market at $300,000 to $500,000 is the most accessible urban investment in any major Colorado city.
• Investment timing: Both Ivywild and downtown are earlier in their gentrification curves than Old Colorado City. Investors buying here are accepting current neighborhood imperfections in exchange for positioning ahead of demographic improvement. The 5 to 8 year appreciation trajectory looks compelling for patient investors.
• Remote work connection: These urban neighborhoods are specifically capturing the remote worker and lifestyle migrant demographic that wants walkability and character without Denver prices. The combination of Garden of the Gods within 15 minutes and a walkable urban neighborhood is a genuinely unique value proposition that Colorado Springs is only beginning to monetize.