Considering purchasing an investment property in Colorado. Broomfield is in between Boulder (15-20 minute drive) and Denver (25-40 minute drive) and has the most expensive rents of the largest cities in the Denver metro, with a two-bedroom median of $2,321; rents went down 0.4% over the past month but rose 16.7% over the past year.
For $575K, with a 20% down payment and 4.25% 30-year fixed mortgage, we can expect a monthly payment of about $2,742.
In the nearby Broomfield area, there are currently three other 3-bedroom apartments for rent, between $2,900 and $3,400, so cash flow may be between $200 to $650 per month. This range is about $2,400 to $7,800 net cash flow per year or a 2% to 6.7% cash-on-cash return.
The new neighborhood around the new construction is primarily suburban, but within a short drive (less than 10 minutes) is a mall with retail shopping and safeway. The home is also located right next to the US-36 which is the reason why Denver and Boulder are so close. The bigger concern is that the neighborhood is very close to a fire station, and would likely hear sirens whenever they leave.
Overall, for a long-term rental, this unit and neighborhood does not seem good enough. Being next to a fire station can be a big annoyance for any family, even though being less than ten minutes away from retail and grocery shopping is convenient. It is in the middle between Boulder and Denver, so would be good for commuting. Financially, the cash on cash return of a long-term rental at current rates is not high, and returns would have to come primarily from property appreciation.