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Cap Rate Analysis: Denver, CO

Investment metrics, interactive calculators, and data-driven analysis for Denver rental properties.

Challenging for pure cash flow
Based on $520,000 median price and $1,950/mo median rent
Est. Cap Rate
2.97%
1% Rule
0.38%
Fails
GRM
22.2x
Price / Income
6.6x

Market Data

Median Home Price$520,000
Median Monthly Rent$1,950
Property Tax Rate0.51%
Population715,522
Population Growth1.1% / yr
Median Household Income$78,600
Vacancy Rate4.9%
Annual Appreciation2.4%

Cap Rate Calculator — Denver

Pre-filled with Denver medians. Adjust to match a specific property.

Property Details
$
$
3–8% typical
%
Monthly Expenses
0.51% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
2.56%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$13,313
net operating income
Gross Rent Multiplier
22.2x
High (>15)
1% Rule
0.38%
✗ Fails
Monthly Cash Flow
$1,109
before debt service
Annual Breakdown
Gross Rental Income$23,400
Less Vacancy−$1,147
Effective Income$22,253
Less Operating Expenses−$8,940
Net Operating Income$13,313

Cash-on-Cash Return — Denver

Factor in financing to see your actual return on invested capital in Denver.

$
$130,000
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-11.63%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$145,600
$130,000 down + $15,600 closing
Monthly Mortgage
$2,543
on $390K loan
Monthly Cash Flow
$-1,412
after all expenses
Annual Cash Flow
$-16,938
before taxes
Cash Flow Breakdown
Monthly Rent$1,950
Less Expenses−$819
Less Mortgage−$2,543
Monthly Cash Flow$-1,412

Is Denver a Good Place to Invest in Rental Property?

Denver, CO has a population of 715,522 and has been growing at 1.1% annually — above the national average, suggesting steady demand pressure on housing. The median home price of $520,000 paired with median rents of $1,950/mo produces an estimated cap rate of 2.97%.

Property taxes at 0.51% are well below the national average of ~1.1%, providing a meaningful cash flow advantage many investors overlook. The vacancy rate of 4.9% is impressively low, indicating tight rental supply and strong tenant demand — favorable for landlords.

At a price-to-income ratio of 6.6x, homes cost about 6.6 times the local median income of $78,600. This elevated ratio means homeownership is stretched, supporting rental demand but limiting buyer pools. Home values have appreciated at roughly 2.4% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.

Bottom line: At current median prices, Denver is challenging for pure cash flow investing. Consider BRRRR strategies with below-market purchases, or look at neighboring metros with stronger price-to-rent ratios.

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