A buy & hold strategy is the least exciting way to build wealth in real estate, and it's the one that works most often. You buy a property, you keep it, and you let time, rent, and amortization do the heavy lifting. In Colorado Springs, where the market has gone flat after a run of fast years, a lot of people have decided real estate stopped working. The numbers say something different. They just say it slowly.
Let's walk through what the math actually looks like — the good parts and the parts nobody puts in an Instagram carousel.
What Buy & Hold Actually Means
Buy & hold means you buy a property with the intention of owning it for years, not months. That's it. It can be:
- A home you live in for 10 years
- A house you bought on a PCS, then rented out when you got orders
- A small rental you picked up near Fort Carson or Powers
- A duplex you live in one side of while a tenant pays down the other
What buy & hold is not: flipping, wholesaling, or buying something in 2026 and expecting to sell it at a profit in 2028. Short holds are a different strategy with a different risk profile. When people tell me real estate "didn't work" for them, nine times out of ten they sold inside of three years.
The Four Ways a Buy & Hold Strategy Builds Wealth
Most people only think about the first one. The other three are usually where the money actually is.
- Appreciation. The property gains value over time. You control the whole asset with a fraction of the price, so a 3% gain on the house is a much bigger gain on your money.
- Principal paydown. Every payment shifts a little more from interest to principal. Somebody else — your tenant, or the rent you're no longer paying a landlord — is retiring your debt.
- Rent growth against a fixed payment. Your principal and interest never change. Rent does. That gap widens every year you hold.
- Tax treatment. Mortgage interest, depreciation on rentals (residential rentals are written off over 27.5 years, though that depreciation gets recaptured when you sell), and the primary-residence gain exclusion. The IRS rules on selling your home let qualifying owners exclude up to $250,000 of gain — $500,000 filing jointly.
Running the Numbers on a $450,000 Colorado Springs Home
Here's a realistic example using late-July 2026 numbers.
On price, the data sources disagree a little, so I'll give you both: Zillow's home value index for Colorado Springs sits around $451,000, down about 2% year over year as of its May 2026 update, while Redfin put the median sale price closer to $472,000, up about 2%. Call it the low $450s to low $470s. I'll use $450,000.
On rates, Freddie Mac's Primary Mortgage Market Survey had the 30-year fixed at 6.58% on July 23, 2026 — but that's for an owner-occupied purchase with 20% down and strong credit. Investment-property loans typically price a half point to three-quarters of a point higher, so I'm running this at 7.125%.
The purchase:
- Price: $450,000
- Down payment (20%): $90,000
- Loan: $360,000 at 7.125%, 30-year fixed
- Principal and interest: $2,425/month
- Property taxes: about $161/month (El Paso County's residential assessment rate is 6.8% for 2026, and the county's effective rate runs around 0.43% — genuinely low by national standards)
- Insurance: about $300/month, and this is the line people get wrong. Colorado Springs sits in hail alley. Average premiums here run roughly $3,200–$5,400 a year depending on coverage and roof age, and a landlord policy usually costs more than an owner-occupied one.
- All in: about $2,886/month
Market rent on a three-bedroom house in Colorado Springs is running about $2,200–$2,400.
Do that subtraction. That property loses roughly $500 to $650 a month on day one — before you set aside a dollar for maintenance or vacancy.
I want to be blunt about that, because it's the part that gets left out: at today's rates, prices, and insurance costs, most Colorado Springs rentals do not cash flow at 20% down. Anyone showing you a spreadsheet that says otherwise is using a stale insurance number.
So why would anyone do this? Because of what happens to those numbers over ten years.
- Principal paydown: About $3,570 comes off the loan in year one. By year ten you've retired roughly $50,000 and the balance is around $310,000. Nobody budgets for that. It happens automatically.
- Appreciation at a conservative 3% a year: $450,000 becomes about $605,000.
- Equity at year ten: roughly $295,000 against $90,000 down. Even after 7–9% in selling costs, you're netting somewhere near $247,000.
- Rent growth: At 3% annual increases, $2,300 rent becomes about $3,000 a month by year ten. Your principal and interest is still $2,425. Somewhere around year four or five, that property flips from bleeding to feeding you — and it never goes back.
What Colorado Springs' Long-Term Numbers Actually Show
This is where local data beats national headlines.
The Federal Housing Finance Agency's House Price Index tracks the Colorado Springs metro with a baseline of 100 in the first quarter of 1995. By the fourth quarter of 2025, that index reached about 404.
That's roughly four times the value in about 31 years — around 4.6% compounded annually.
Over the last five years, the metro appreciated somewhere in the low 30% range. Over the last twelve months, it's been flat to slightly negative.
All three of those numbers are true at once. That's the point. The long-term line is up and to the right, and it's made up of stretches exactly like the one we're in now.
The demand side hasn't changed either. Fort Carson, Peterson, Schriever, and the Air Force Academy rotate families through every two to four years, and the city keeps adding people. If you want the honest version of that story, I wrote about why people keep moving to Colorado Springs and why they stay.
The Military Angle: Buy & Hold by Accident
Some of the best long-term portfolios I've seen in this town weren't planned. They were built by service members who bought at each duty station and kept the house when orders came.
A few things make that work here specifically:
- VA-backed loans** require no down payment**, so you're not tying up $90,000 in one property.
- Entitlement can often be reused, which means a PCS doesn't have to mean selling.
- A low-rate loan is an asset by itself. If you locked something in the 2s or 3s, that loan may be worth more than your equity — which is exactly why assumable VA loans have become a real negotiating tool here.
- Active-duty owners can suspend the five-year residency clock on the primary-residence gain exclusion for up to ten years of qualified extended duty. Very few people know that rule exists, and it can be worth six figures.
Your BAH drives what you can qualify for in the first place. I broke that down rank by rank in the 2026 Colorado Springs BAH guide.
Talk to a CPA before making a tax-driven decision. I'm a REALTOR®, not your accountant.
Where Buy & Hold Goes Wrong
The strategy is sound. Execution is where people get hurt.
- Selling too early. Round-trip costs commonly run 7–9% between both closings, and commissions are negotiable now. In a flat market, a three-year hold is a loss. Five years is usually the floor. Ten is where it gets comfortable.
- No reserves. This is hail country. Most Colorado carriers have moved to percentage-based hail deductibles — 1–2% of dwelling coverage means you're absorbing the first $4,000–$8,000 yourself. A full roof replacement runs well into five figures. If that would end you, you're not ready to hold through a rough year.
- Buying a house that doesn't rent. A $700,000 home doesn't rent for proportionally more than a $500,000 one. Rent-to-price gets worse as you climb price points.
- Counting on appreciation to fix a bad purchase price. Appreciation is the reward for holding, not a rescue plan for overpaying.
- Ignoring HOA rental caps. Several master-planned communities here limit or prohibit rentals. Check before you close, not after you get orders.
Bottom Line
A buy & hold strategy in Colorado Springs isn't about timing the market. It's about owning long enough for four separate forces — appreciation, principal paydown, rent growth, and tax treatment — to stack on top of each other.
The Key Takeaways:
- Most local rentals lose money on day one at today's rates and insurance costs. Expect that going in.
- Principal paydown and rent growth do quiet work nobody notices for the first few years, then become the whole story.
- Colorado Springs has roughly quadrupled in value since 1995 — through flat stretches exactly like this one.
- Under five years, transaction costs usually win. Plan on ten.
- Military buyers have structural advantages here that civilians don't. Use them.
A flat market is a fine time to buy something you plan to keep. It's a terrible time to buy something you plan to sell.
If you're weighing a property and want the actual numbers on it — rent estimate, carrying cost, break-even year — send it to me and I'll run it. No pressure, just the math.
Brandon Lecocq | The Ridgeline Group
- Phone: (719) 413-6610
- Email: [email protected]
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