Faro Labs / Markets / Denver, CO
Denver real estate investment market
What a typical rental in Denver, Colorado costs, rents for, and returns: underwritten by Faro's own engine, not a scraped summary.
Returns assume 20% down at 6.75% over 30 years, 7% vacancy, and standard operating costs: Faro's default assumptions, the same ones every report starts from. Home value and rent trends as of 2026-05-31.
Difficult for both
At market rent, a typical Denver rental runs $1,982 short each month, and home values moved −3.9% over the last year. Neither leg is carrying deals right now, which means the ones that work here are bought well below market rather than at it.
The price a deal actually works at
Faro models five price points for Denver, from a weak buy to a strong one. The market-rate deal is $539,712; a good buy is $485,741 and a great one $431,770 roughly 20% below market value. Those are the bars a specific listing gets measured against when you run it.
How Denver compares
Of the 210 markets Faro publishes, Denver is the 55th most expensive to buy into: 36% above the median covered market, and the 171st strongest on rent-to-price. Within Colorado it's the 3rd priciest of 6 markets we cover. On the last year of home-value change it ranks 194th.
To break even at the default financing, a typical Denver property would need about $4,401 a month in rent: $2,447 more than the $1,954 the market currently supports.
What each tier costs in Denver
Faro models five price points per market. A listing gets measured against these bars, not against a national average.
| Tier | Purchase price | Market rent | vs. market rate |
|---|---|---|---|
| Weak buy | $593,683 | $1,856/mo | +10% |
| Fair buy | $566,698 | $1,915/mo | +5% |
| Market rate | $539,712 | $1,954/mo | — |
| Good buy | $485,741 | $2,052/mo | -10% |
| Great buy | $431,770 | $2,149/mo | -20% |
A typical Denver deal, underwritten
The market-rate property above, run through the same engine every Faro report uses.
| Purchase price | $539,712 |
|---|---|
| Monthly rent | $1,954 |
| Cash required (20% down + 3% closing) | $124,134 |
| Net operating income | $9,817/yr |
| Monthly cash flow | -$1,982 |
| Cap rate | 1.8% |
| Cash-on-cash return | −19.2% |
| DSCR | 0.29 |
Values are falling here
Home values in Denver moved 3.9% DOWN over the last year, measured as the median across 27 ZIP codes. That reverses the usual argument for a low-cash-flow buy: there's no appreciation currently carrying the deal, so a property here has to earn its keep on rent, and a typical one produces a $1,982 monthly shortfall. Falling values also mean today's comp-supported price is a moving target. The discount you negotiate matters more than usual.
What it would take to break even
A typical Denver property would need about $4,401 a month to cover itself at the default financing: 125% above the $1,954 the market currently supports. That gap is the honest size of the problem: it isn't closed by trimming an expense line, it's closed by buying meaningfully below market, putting more down, or finding a property that rents well above its market's median.
Where it sits in Colorado
Faro covers 6 Colorado markets, and Denver is the 3th priciest of them at $539,712. Within a single state the tax and insurance environment is broadly shared, so the differences between these markets come down to price, rent, and pace, which makes them the most useful comparison set on this page. The nearby markets listed below are the rest of that set.
Denver investor questions
Is Denver a good place to buy rental property?
A typical Denver rental at $539,712 renting for $1,954 a month returns 1.8% on a cap-rate basis and runs short by $1,982 a month at 20% down. Individual deals vary far more than markets do, which is the whole reason to underwrite a specific address.
Can you cash-flow a rental in Denver?
Not at the market's own price and rent. A typical property runs $1,982 short each month. It would need about $4,401 in rent to break even. Deals that work here are bought below market rather than at it, which is what the price ladder above is for.
Are Denver home prices dropping?
Yes: values moved down 3.9% over the last year, taken as the median across 27 ZIP codes in the city. That makes the price you negotiate matter more than usual, since the comp-supported value you're measuring against is itself moving.
Are rents going up in Denver?
Rents moved down 2.0% over the last year, measured across 27 ZIP codes. The typical market-rate rental sits at $1,954 a month.
Other Colorado markets
Run the numbers yourself
A market average is not a deal.
Paste a real Denver listing and Faro underwrites that specific property from its own comps, with a target price you can actually offer.
Estimates for analysis and educational use only: not financial, investment, tax, or legal advice. Verify every number independently before making a purchase decision.