The Pueblo real estate market offers investors a lower cost of entry than Colorado Springs and Denver. With the economy shifting from industrial areas to technology-focused fields, there’s reason to believe the city will keep growing. Not sure if this is the right market for you? Read the rest of the guide to learn more about Pueblo’s economy and growth, real estate investing opportunities, and trends.
Pueblo Economy and Real Estate Market Overview
Historically, the Pueblo economy has been mostly focused on industrial entities, such as steel mills, AC manufacturing, and a cement plant. There has been a lot of recent interest from aerospace and technological industries because the infrastructure is already in place and there’s plenty of land available to build on.
There’s also substantial spillover from the tech industry in Colorado Springs to Pueblo. Because Pueblo is nearby and has the infrastructure to support these businesses, it’s an attractive option for companies. Similarly, the military presence in Colorado Springs is also growing in Pueblo. Many military personnel and their families search move to Pueblo for more affordable rental housing and lower cost of living. These families prefer to rent over buying knowing they will only be in a location for a couple of years.
A housing shortage accompanying growing economic sectors is driving a construction boom in the area. The Pueblo city planning department is in the process of reviewing projects that could potentially create 17,000 new dwelling units. This number is more than double the amount approved for any year since 2003.
Anecdotally, Pueblo landlords have been approached by construction workers looking for medium term rental housing. This suggests that targeting this pool of tenants market may be a viable rental strategy.
Pueblo is similar to COS in types of employment:
As prices increase in Colorado Springs and the Denver Metro area, we are seeing more activity in the Pueblo real estate market as well. Prices have been increasing at 10-22% year over year since Q3 2018.
Inventory has steadily tightened since 2010, with a slight bump in 2014. We’re observing investor activity moving from the large metro areas to Pueblo as well, which is helping sellers. The real estate market in Pueblo is becoming steadily more competitive.
In 2022, the median price for a single family home reached $310,000, up 19% from the previous year. While this marks a significant increase in the Pueblo housing market, the cost to entry is still substantially lower than other nearby areas such as Colorado Springs (median price of $470,000 as of August 2022) and the Denver metro area (median price of $635,000 as of August 2022).
Pueblo has been in a seller’s market for quite some time, though some of the demand is expected to go down as more housing is built. However, home values are expected to continue increasing.
Single Family Rental Property Investing in Pueblo
In this section, we consider single family rentals (SFRs) as residential housing that includes townhomes and single family homes (SFHs). This section aims to discuss the current SFR real estate market for Pueblo and what this means to buy and hold investors. While condos are typically included here, there is not a large population of condos in Pueblo and they are not a part of this overview.
To give investors a better idea of properties they’ll find in Pueblo, we’ve done several property walk videos. Go here to see a newer, 1980s home. For an older, turn of the century rental property, watch this video.
Price and Sales Trends
We’re evaluating price and sales trends using the Housing Price Index (HPI). The HPI is a broad measure of the movement of single family house prices. The HPI is a weighted, repeat-sales index, measuring average price changes in repeat sales or refinancing on the same properties. This data is obtained by reviewing repeat mortgage transactions on single family properties whose mortgages have been purchased/securitized by Fannie Mae or Freddie Mac since January 1975.
When we look at the HPI in Pueblo, Colorado Springs, and nationally, we can see that prices in all three markets continually trended upwards over the past five years. Over that time, Pueblo has had a lower HPI (lower cost to enter the market) than both the Colorado Springs market and the national average.

In fact, both Pueblo and Colorado Springs exceeded the national average in terms of year over year HPI change in the past five years. Since 2018, Pueblo has been performing slightly better in this metric than Colorado Springs.

Pueblo’s index is lower than in Colorado Springs, likely implying a lower entry point. Meanwhile, the rate of increase from 2018 to present is reflecting higher.
Average Pueblo home and condo price from 1985-1990 was somewhat stagnant, then it trended upward until the 2007 recession. During that time, the Pueblo real estate market dropped -13%, while Denver declined -25%. Since 2016, Pueblo home prices have trended upwards at a faster pace than the previous increase.

Rent Trends
Rents are increasing at a faster rate in Pueblo than Colorado Springs, but rental amounts in Pueblo are lower, likely in line with lower home values in Pueblo.
In Pueblo, there is slightly less burden on the renter’s income compared to Colorado Springs. Anything 33% and under is a good metric, since most landlords require 3x rent as an income requirement.

Underwriting in Pueblo
We tailor our underwriting standards to the trends we’re observing in the Pueblo real estate market.
1% Rule: The 1% Rule states that the monthly rent should be 1% of the purchase price. You will rarely find properties that meet these rules in Pueblo. These rules do not equal great rental properties or long term wealth building.
50% Rule: The 50% Rule states that 50% of your rental income will go towards the property operating costs (all the costs except for mortgage payments).
In the Pueblo area, we typically see between 25% to 35% of rents going toward the operating costs—similar to Colorado Springs and Denver. We underwrite conservatively and realistically! Make sure you understand the underwriting numbers from listings and other agents.
Below is an outline of ballpark estimates we use for underwriting Pueblo properties, which we adjust based on additional known information:

This is a 2 bedroom/2 bathroom townhouse built in the 1980s. It has the potential to be converted into a 3 bedroom/3 bathroom unit.
Pueblo Townhouse Rental Example



Pueblo Single Family Home Rental Example
This is a 3 bedroom/1 bathroom single family home built in the early 1900s.



The following chart compares the different types of residential units (townhome and single families) to one another in terms of cash-on-cash return as well as cap rate.

Both of these properties yield similar results, though the more expensive townhouse performs slightly better. There is a good opportunity for investors to make solid returns for a lower cost of entry than Colorado Springs or the Denver metro area.
Multifamily Rental Property Investing in Pueblo
For purposes of this section, multifamily homes consist of properties with two or more units—duplex (2-unit)four plex 4-unit), and so on.
Pueblo Duplex Rental Example
This is a turnkey duplex in Pueblo.



Pueblo Fourplex Rental Example
This is a newbuild fourplex in the northeast area of Pueblo. It features 2 bed/1 bath side-by-side units.



The following chart compares the different types of multifamily units (duplex and fourplex) to one another in terms of cash-on-cash return as well as cap rate.

The fourplex offers significantly better returns compared to the duplex.
BRRRR Investing in Pueblo
As BRRRRs become more difficult to execute in Denver and Colorado Springs, investors are turning to the Pueblo real estate market to execute this strategy. They hope the lower price points will help make their BRRRRs successful. In this section, we analyze the state of BRRRRs in Pueblo.
What Is BRRRR?
There are many different real estate investing strategies, including buy-and-holds (traditional rental properties), wholesaling/assignments, fix and flips, short term rentals, syndication, and more. A BRRRR strategy is a repeatable “buy and hold” sub-strategy to acquire rental properties for little to no money down.
BRRRR is an acronym that means:
- Buy—Purchase property in need of repair below the current market value.
- Renovate—Fix up the property to excellent rental condition.
- Rent—Rent out the property for positive cash flow.
- Refinance—Cash-out refinance at a higher appraised value to receive back most, or all, of your initial down payment and renovation costs.
- REPEAT!
Pueblo BRRRR Example
This is an example of a recently completed single family home BRRRR in Pueblo:
Buy—Purchased for $111,000.
Loan: $135,000 hard-money loan also used to fund the cost of repairs.
Renovate—Full House Rehab of $27,000 (closing fees, holding costs, repairs).
All In: $138,000 ($3,000 personal funds).
Rent—Rented at $1295/mo.
Refinance—Appraised at $221,000.
New Loan at $144,100, using rate and term refinance.
Equity of $76,891 in the home.
Repeat–The investor has a substantial amount of equity in the home that will allow him to utilize a cash out refinance to repeat the strategy.
BRRRR Strategy Benefits
There are several benefits to utilizing the BRRRR Strategy. The first one is risk mitigation. Generally speaking, the value of the property should increase at a greater rate than the cost to improve (it is not a dollar-for-dollar benefit). This is also known as ‘forced appreciation’ and will help to protect your investment in the event of a market crash if values drop.
The second benefit is that you now own an improved property. As a result, there is lower risk of unbudgeted short term capex or repairs needed to fix poor workmanship (since in theory, you oversaw the contractor who performed the repairs).
Third, the BRRRR strategy results in more liquid funds to the investor. Since you are pulling cash out, you can utilize the funds for reserves or buying additional investments.
BRRRR Strategy Risks
Just as there are several large benefits to utilizing the BRRRR strategy, there are also risks that investors must be aware of.
There is a time factor involved, where your cash may be ‘stuck’ in a property for longer than originally planned. It is important that investors use funds that they are not necessarily relying on for life needs, as the timeline of the BRRRR could take longer. Most lenders require a seasoning period (a set period of ownership) prior to being able to perform a cash-out refinance.
Another risk is that you may not be able to pull out as much cash as originally thought. Factors that can contribute to that include weaker than expected appraisals, rehabs that go over budget or take longer than anticipated, or a combination of both! Ultimately, this could result in less cash out than planned, or the investor’s cash remaining in the property longer than expected.
In the current interest rate environment, it can be hard to predict where a refinance rate will land, and may widely vary between purchase and refinance.
Current State of BRRRRing in Pueblo
We have some clients who have successfully completed, or are in the process of completing, BRRRRs in Pueblo. With the help of Envision Advisors, these clients are able to identify properties that have the potential to create forced equity through rehab to the property, and we are able to provide guidance on how to structure the deals to their benefit, keeping in mind the various components of BRRRR.
The risks that we are currently facing in the market as of Fall 2022 are:
- Materials/rehab risk due to supply chain issues and high costs
- Interest rate risk caused by an unpredictable interest rate environment
- Market risk to include fluctuating values of assets, mostly impacting the final refinance because of inflation and volatility of markets
Frequently Asked Questions about Pueblo’s Real Estate Market
Where in Pueblo Should I Invest?
Pueblo is a growing city that has many neighborhoods that appeal to renters. The downtown and Riverwalk areas are being revitalized, Colorado State University Pueblo is centrally located, and there is a sizable medical complex. All of these areas attract different renter pools looking for either long, medium, or short term housing.

The best location to invest in will depend on your price point and rental strategy. Reach out to us for more details and request access to our Map Walk video in which we examine different neighborhoods in detail.
What Is the Unemployment Rate in Pueblo?
Compared to Colorado Springs and the national average, Pueblo has had a higher unemployment rate than both over the past 30 years.

All three unemployment rates were steadily decreasing until Covid. Pueblo has not improved as quickly as the other two since.
This metric may make investors more nervous about potentially investing in Pueblo, since it is a riskier market than the Springs. Landlords want all of their tenants to be gainfully employed, and if there’s a higher risk they won’t be, that risk is passed on to the landlord. For investors concerned about unemployment, underwrite the property with a higher vacancy than average to ensure that the numbers still make sense.
Is the Population Growing in Pueblo?
Pueblo has seen population growth over the past 20 years at a steadier pace than Colorado Springs. The population growth in Colorado Springs is outpacing the availability of housing, potentially causing a spillover effect in Pueblo.

How Affordable Are Rents in Pueblo?
In 2015, the median monthly rent for a 2 bedroom home in the Springs was $924, compared to $653 for Pueblo. By 2020, the Springs grew to $1243 while Pueblo went up to $861. Over time, both areas are becoming less affordable, though not excessively.

When we take into account per capita monthly income, we can determine the burden of rent on the renter’s income. Overall, the difference in affordability between these two areas is not huge, though Pueblo is slightly more affordable at 24% vs the Springs’ 27%.
What Natural Resources Does Pueblo Have That Are Helpful for Development?
Unlike many areas in Colorado, Pueblo City has an abundance of water. Currently, there are about 170K people in the county, but it has enough water for a population of just under half a million. This makes Pueblo a great place for new builds.
In fact, new builds are so popular in this area that builders and construction crews can’t keep up with the demand. Most new development in the city is sold quickly after going to market. Being in such a great position on water is a main factor. The Pueblo real estate market is likely to keep growing because the area has resources that are in high demand.
What Are Some New Public Policies in Pueblo That Will Benefit Investors?
The local government in Pueblo is doing everything they can to bring in more investors because there’s currently a housing shortage. One of the ideas in the works is a vacant property tax for both residential and commercial properties.
At one time, 7% of all housing in Pueblo was vacant. The city created a vacant house registry and the police department started fining property owners whose houses were in disrepair. The vacant property tax would benefit investors, since property owners who don’t want to pay the tax will look to sell their properties. Decreasing the number of vacant homes will boost the Pueblo real estate market and make it more attractive to buyers.
Pueblo is transitioning to becoming the most business-friendly town in the state. The government is cutting red tape and creating a one-stop shop for setting up a business. Instead of having to go to different entities for permits and approvals, business owners can get everything they need all at once. They’re also in the process of shifting everything online so you can start your business in Pueblo from anywhere in the world.
What Attracts Businesses to Pueblo?
Pueblo has PEDCO, Pueblo Economic Development Corp., which is funded by a continually renewed half cent sales tax. It helps set up businesses and incentivizes them for staying in the area for a certain number of years and hiring a specific number of local residents. PEDCO offers tax incentives for buying property and helps pay for it.
The city is also offering incentives to energy companies. Pueblo is in a constant fight when it comes to energy, and the nearby power plant employs many local people. When that plant shuts down, employees could lose their jobs, which offers a huge workforce for another company.
What are Some of the Revitalization Projects Happening in Pueblo?
Watertower Place is a great example of a successful revitalization project. It’s a historic building that was originally the first meat packing plant west of the Mississippi river. It survived a big flood 100 years ago and has a lot of interesting history. The current owner acquired the building three years ago. Now, the facility promotes a culture of collaboration, prosperity, and positive thinking.
The Holmes Hardware building is under development, and they plan on having it up and running within three years. It will have a food hall on the first floor as a restaurant incubator and affordable apartments above it. These developers are breaking the mold for how to get things done.
Learn More about the Pueblo Real Estate Market
Check out our Latest Deals page to see the latest deal analyses on investment properties in Pueblo.