Guernsey: NoCo real estate investors: Consider ‘zooming out’
As Northern Coloradans, we pride ourselves on the Front Range’s (no longer secret) quality of life, diverse economy and strong sense of community. That pride is well founded as we continue to invest in and love this community. That being said, is it possible there are downsides to our pride? Maybe some blind spots created as a result?
In particular, we contend it has led to a fairly narrow view regarding our definition of the geographic ‘Front Range.’ Could it be that the land to the north, just across the state line, could or should be considered an extension of the ‘Front Range?’
If you are like many Northern Coloradans, you likely regret not investing (or not investing more) in our real estate market 20 years ago. While Northern Colorado continues to be a strong investment choice in terms of current and future stability, real estate investing here has in many ways ‘arrived,’ no longer ahead of the curve with affordability oftentimes being a challenge. And we’re not just talking about Northern Colorado as Loveland, Fort Collins and Greeley; we’re including neighbors like Windsor, Berthoud, Evans, Eaton and Ault.
Well, consider this your not-so-subtle nudge to look farther north for your next real estate investment. One region that regularly blips on our radar is southern Wyoming, primarily Laramie and Cheyenne. Often regarded as the ‘wild west, those towns 45 minutes but a world away have historically avoided the wide scale attention investors afford to the Northern Colorado Front Range.
Located within a one-hour (easy) drive from Northern Colorado, it fits our personal preference toward being able to drive and check on investment properties within a few hours. Couple that with access to recreation, low unemployment rates, well-funded public education, and pro-business policies, and real estate in these cities appear poised for steady appreciation.
Laramie is home to Wyoming’s only university, and a $250 million construction to upgrade the campus infrastructure and student housing is underway. Fifty miles east on Interstate 80 is Cheyenne, home to F.E. Warren Air Force Base. Warren is the first base in the nation in the early stages of an $86 billion upgrade to its missile program. The upgrade includes new launch facilities, missile sites, hardware, software and command technology and is anticipated to make a large economic impact on Cheyenne and the surrounding area.
In addition to Laramie and Cheyenne’s economic outlooks, there are other stabilizing factors making it an attractive market to consider for real estate investments.
1. Quality of life. Once the work-from-anywhere movement got its legs, the Mountain West states have seen steady growth, as people flock to live in areas closer to the great outdoors, with cleaner air and safer neighborhoods, all of which Wyoming towns can boast.
2. Income tax. Wyoming residents benefit from no state income tax, and Wyoming businesses benefit from no state corporate income tax.
3. Low real estate tax incentives. In comparison to Colorado, Wyoming’s real estate taxes are relatively low. While the assessment rate for residential properties is 9.5% in Wyoming, vs 6.95% in Colorado, the commercial real estate assessment rate is only 9.5% (or 11.5% for industrial), vs the staggering 29% in Colorado for commercial properties. When comparing a $1 million commercial property investment between the two states, the property tax in Wyoming is a quarter of what it would be in Colorado, at around $6,900 (vs the $30,000 you’d pay in NoCo).
Don’t get us wrong: Northern Colorado remains strong as an investor’s market and a market we will continue to invest in. For the reasons outlined above, we suggest a looser definition of the ‘Front Range’ could pay dividends for those investors willing to take a wider view.
Josh Guernsey is managing partner of Waypoint Real Estate in Fort Collins.