Denver's real estate market is known for its rapid growth and strong rental demand, making it a hot spot for investors. U.S. News & World Report recently named the Denver metro area the fifth-hottest housing market in the country, awarding it 71.5 points out of 100 for its health and resilience.
However, the Mile High City is also a notoriously pricey place to buy a home — a study of the most expensive non-coastal housing markets found that the top four were on Colorado’s Front Range, with Denver coming in at No. 2.
Denver’s average home sale price of $729,355 can be intimidating, but several neighborhoods still offer affordability and strong rental potential if you know where to look.
As Colorado’s largest city — and the center of a trendy and growing metro area — Denver’s housing market certainly offers plenty of high-priced real estate. That’s why it’s so important to keep an eye on the neighborhoods you’re interested in so you’ll be better poised to move quickly and potentially close on your next investment home.
If you’re hoping to invest in Denver real estate but are unsure where to look for reasonably priced properties, consider these five neighborhoods, where it’s still possible to find affordable homes with a promising return on investment.
Why Invest in Denver's Real Estate Market?
There are plenty of reasons why Denver could be the perfect place to invest in real estate, from its strong rental market and economic growth to the city’s lifestyle appeal.
With strong demand for rentals from young professionals, students and families, Denver is filled with people who could be your prospective tenants.
The Denver metro area grew by 2.8% from 2020 to 2024, an increase of 82,255 residents that’s attributed in part to the city’s “ability to attract younger people in their 20s and 30s with outdoor recreation and lifestyle perks,” who then build families here, Denverite reported. Denver’s median age of 35.4 is younger than both the state’s (37.9) and the country’s (39.2).
The Mile High City also attracts students attending one of its many colleges and universities, including the University of Denver and the University of Colorado Denver.
Denver demonstrates strong economic growth and a steady job market, particularly in the technology, healthcare and education sectors. Citing strong pay growth, high starting salaries and an impressive hiring rate, the Denver metro area was named the hottest labor market in the U.S. in 2024.
And finally, Denver has always drawn people in with its high quality of life, offering access to outdoor activities and a vibrant culture. With spectacular mountain views, easy access to hiking or skiing on the weekends, and an abundance of breweries, Denver natives are the envy of people across the country.
Methodology for Selecting Affordable Neighborhoods
We developed our list of the top five neighborhoods with affordable homes in Denver, Colorado, using four primary criteria: affordability, rental yield, market trends, and amenities and attractions.
Each of these neighborhoods has an average home sale price below Denver’s citywide average. They also all have a strong potential for rental income, as well as housing market stability, potential for property value appreciation, and proximity to transportation, schools, parks and shopping.
Top 5 Neighborhoods Investors Should Consider for Affordable Homes in Denver, Colorado
Westwood: Average sold price of $398,909
The Westwood neighborhood makes up part of Denver’s westernmost edge, resting against the city’s border with Lakewood, South Sheridan Boulevard. Westwood extends to West Alameda Avenue to the north, Federal Boulevard to the east and West Mississippi Avenue to the south.
Homes in this neighborhood sell for an average of $398,909, with an average price per square foot of $363. Westwood homes sell after an average of 34 days on the market, below the citywide average of 39 days. A total of 126 homes have sold in the neighborhood over the past year.
This southwest Denver neighborhood has a strong Hispanic heritage and includes Westwood Creative District, one of the state’s 30 certified Colorado Creative Districts.
Barnum: Average sold price of $454,191
Barnum, another neighborhood on Denver’s southwest side, is immediately north of Westwood, bordered by Sixth Avenue, Federal Boulevard, West Alameda Avenue and Perry Street. It has an average home sold price of $454,191, an increase of 2.9% year over year, with an average price per square foot of $394. Barnum homes sell after an average of 22 days on the market, well below the citywide average of 39 days. Over the past year, 51 homes have sold in the neighborhood.
Named after famous showman P. T. Barnum, this largely residential neighborhood features Barnum Park, a city park with amenities including a dog park and recreation center. It’s part of a swath of West Denver targeted by a city effort, called the West Area Plan, intended to improve the quality of life in the area.
Montbello: Average sold price of $448,876
Located on Denver’s east side, Montbello is sandwiched between the city of Aurora and the Rocky Mountain Arsenal National Wildlife Refuge. It’s bordered by I-70 to the south, East 56th Avenue to the north and Havana Street to the west.
Homes in Montbello sell for an average of $448,876, with an average price per square foot of $246. In this neighborhood, homes sell after an average of 21 days on the market, significantly less than the citywide average of 39 days. In total, 226 Montbello homes have sold in the past year.
Montbello is just west of Denver International Airport, the third-busiest airport in the country.
Mar Lee: Average sold price of $467,514
Like Westwood, Mar Lee can be found on Denver’s southwest side on the border with Lakewood. It’s immediately south of Westwood, bordered by South Sheridan Boulevard, West Mississippi Avenue, Federal Boulevard and West Jewell Avenue. This neighborhood trends younger, and its green spaces include a portion of Sanderson Gulch Trail.
Mar Lee has an average home sold price of $467,514, up 2.2% year over year, with an average price per square foot of $347. Mar Lee homes sell after an average of 23 days, well below the citywide average of 39 days. Over the past year, 129 homes have sold in Mar Lee.
Ruby Hill: Average sold price of $468,830
Nestled in south Denver, just east of Mar Lee, Ruby Hill’s boundaries are West Mississippi Avenue, the South Platte River, West Jewell Avenue and Federal Boulevard. Sanderson Gulch Trail continues into Ruby Hill from Mar Lee, and this neighborhood also includes Ruby Hill Park. In the winter, Ruby Hill Rail Yard opens, offering a free opportunity for skiers and snowboarders to hone their skills within Denver city limits, thanks to a partnership between Denver Parks and Recreation and Winter Park Resort.
Homes in Ruby Hill sell for an average of $468,830, an increase of 0.9% year over year, with an average price per square foot of $354. In this neighborhood, homes sell after an average of 24 days, below the citywide average of 39 days, and 85 homes have sold in the past year.
Tips for Investing in Affordable Homes in Denver, Colorado
Once you find your dream Denver investment property, consider working with a top property management company to handle tenant relationships and maintenance. An older home, while generally more affordable, might require more maintenance or even a full-on renovation before you can rent it out — and a property manager can help make the process less of a headache.
While you’re looking for your new investment property, you should also keep in mind that the property isn’t the whole picture — it’s also essential to pay attention to a neighborhood’s class to determine whether a particular property is a solid investment. Simply buying the cheapest-possible property likely isn’t the best investment strategy.
Looking to buy affordable homes in Denver, Colorado? Our local, investor-friendly agents can help.
