Thinking about buying a rental in Fountain and want to be confident about cash flow? You’re smart to ask. Steady returns come from clear underwriting, not guesswork. In this guide, you’ll learn how to size up rents, budget realistic expenses, plan for seasonality tied to Fort Carson, and plug everything into a simple calculator framework. Let’s dive in.
Why Fountain attracts renters
Fountain sits just south of Colorado Springs with quick access to the I-25 corridor. Many renters are connected to Fort Carson, local public sector roles, and regional employers. That mix can create durable demand across most seasons.
Proximity to Fort Carson is a key driver. You also benefit from commuter patterns into Colorado Springs, local services, and family-friendly neighborhoods. When cash flow is your goal, that steady tenant base matters.
Build rent comps that map to reality
Strong underwriting starts with a conservative rent estimate. Aim for a range, not a single number. Pull active and recently leased listings within about 5 to 10 miles of Fountain and sort by property type and condition.
Use filters that mirror your property. Typical segments include 2-bedroom single-family or duplex, 3-bedroom single-family, and 4-plus-bedroom single-family or small multifamily. Identify features that influence rent, like garage parking, finished basements, updates, and whether any utilities are included.
Create conservative, median, and aggressive lines by grouping comps into 25th, 50th, and 75th percentiles. Always date your comps so you can update them quickly as the market shifts.
Adjustments that move rent
- Condition and updates: kitchens, baths, HVAC, and appliances can push rent higher.
- Parking and storage: garages, off-street parking, and usable storage space add value.
- Utilities included: owner-paid water, sewer, or trash changes what tenants will pay.
- Furnished vs unfurnished and lease length: short-term or furnished housing can rent differently, subject to local rules and HOA policies.
- Proximity: easy access to Fort Carson or transit can improve demand.
Budget operating expenses that stick
Your expense budget needs to be grounded and complete. You can itemize each line and then check your work against a rule-of-thumb percentage. Many investors use the 50 percent rule as a quick sanity check, but itemized numbers should drive your analysis.
Property taxes and insurance
- Property taxes: Pull the actual tax bill from the El Paso County Assessor or Treasurer. Tax amounts can vary by neighborhood and assessed value.
- Insurance: Get a landlord policy quote from a local agent. Factor Colorado exposures like wind and hail. Premiums vary by home age, construction, and claims history.
Management, maintenance, capex
- Property management: Full-service single-family management typically ranges from 7 to 12 percent of monthly rent. Small multifamily often runs 6 to 10 percent, depending on service level.
- Maintenance and repairs: Budget 5 to 10 percent of gross rent or set a per-unit annual amount. Older homes or those with deferred maintenance warrant higher budgets.
- Capital expenditures: Separate from maintenance. Reserve 5 to 10 percent of gross rent or a set per-unit annual amount to cover lifecycle items like roofs, HVAC, or major appliances.
Vacancy, utilities, HOA, other
- Vacancy and turnover: Use a 5 to 10 percent baseline and adjust as you learn your submarket. Include leasing fees and make-ready costs during turnovers.
- Utilities: Confirm what the tenant pays and what the owner covers. For any owner-paid utilities or common-area costs, use recent invoices.
- HOA fees: If applicable, they can materially change cash flow. Verify current dues and what they include.
- Legal, accounting, and admin: Add a small annual allowance to cover routine needs.
Vacancy seasonality near Fort Carson
Military moves tend to cluster in late spring through summer. The PCS season, often May through August, brings more listing activity and faster lease-ups. Off-season, you may need extra marketing time or modest incentives.
Plan lease start and end dates to align with peak demand. If a lease would end in mid-winter, consider offering a shorter or longer term to transition the next turnover into PCS season. Winter weather can slow relocations, but the region’s broad employment base keeps demand steadier than resort markets.
Your cash flow calculator
A simple, repeatable calculator keeps your underwriting honest. Gather exact numbers where possible and default to conservative assumptions elsewhere.
Inputs to collect
- Purchase price and down payment
- Loan terms: interest rate, amortization years, points, lender fees
- Monthly rent and other income (pet fees, storage)
- Vacancy rate as a percent of gross rent
- Management fee percent or fixed fee
- Annual property tax and insurance
- HOA dues, if any
- Owner-paid utilities and common-area costs
- Maintenance and repair budget
- Capital expenditure reserve
- One-time closing costs and initial repairs
Key formulas
- Effective Gross Income (EGI) = Gross Scheduled Rent + Other Income − (Vacancy Rate × Gross Scheduled Rent)
- Operating Expenses = property tax + insurance + management + utilities + maintenance + capex reserve + HOA + legal/other (annualized)
- Net Operating Income (NOI) = EGI − Operating Expenses
- Annual Debt Service = monthly mortgage payment × 12
- Cash Flow Before Tax = NOI − Annual Debt Service
- Cap Rate = NOI ÷ Purchase Price
- Cash-on-Cash Return = Cash Flow Before Tax ÷ Total Cash Invested
- DSCR = NOI ÷ Annual Debt Service
- GRM = Purchase Price ÷ Gross Scheduled Rent
Illustration: baseline scenario
- Monthly rent: R
- Other monthly income: O
- Vacancy rate: v percent of gross rent
- Management fee: m percent of collected rent
- Annual property tax: T
- Annual insurance: I
- Owner-paid utilities and HOA: U (annual)
- Maintenance and repairs: M (annual)
- Capex reserve: C (annual)
- Loan terms: interest rate, amortization, and monthly payment P
Steps:
- EGI = (R × 12 + O × 12) − [v × (R × 12)]
- Management expense = m × (R × 12)
- Operating Expenses = T + I + U + M + C + Management expense
- NOI = EGI − Operating Expenses
- Annual Debt Service = P × 12
- Cash Flow Before Tax = NOI − Annual Debt Service
- Cap Rate, Cash-on-Cash, and DSCR as above
Stress tests to run
- Break-even rent: Increase or decrease R until Cash Flow Before Tax equals zero. That shows the rent you need to hold the line.
- Rent-up time: Model 1, 2, and 3 months of vacancy between tenants and see the annual cash flow hit.
- Rate shock: Add 1 to 2 percent to your interest rate and recompute P to see the impact on cash flow and DSCR.
- One-time capex: Drop a 5k to 10k roof or HVAC in year one and see how it affects returns and reserves.
Risk reduction playbook
- Align lease expirations with PCS season when possible. That timing can reduce vacancy days and improve pricing power.
- Get quotes, not estimates. Use the El Paso County tax bill and a local insurance quote specific to the property.
- Over-budget maintenance on older homes. Freeze-thaw cycles and hail can add wear. A larger reserve is a safety valve.
- Consider professional management if you are remote or time constrained. Factor the fee in from day one.
Underwriting checklist
- Three to five recent, comparable leased rents within 5 to 10 miles and a dated summary of active listings
- Current property tax bill and assessed value from the county
- Insurance quote for a landlord policy with appropriate coverage
- Rent roll and trailing 12-month expenses if purchasing an existing rental
- HOA documents and dues, if applicable
- Utility responsibility matrix and recent invoices if any utilities are owner-paid
- Property condition report or inspection summary with age of roof, HVAC, water heater, and major systems
- Lender pre-approval and draft loan terms for accurate debt service
Ready to analyze a property?
If you want disciplined, investor-aware underwriting tailored to Fountain and the south Colorado Springs corridor, we’re ready to help. We’ll pressure-test the rent, build a realistic expense model, and map your lease strategy to PCS season. Start a focused review with DogHouse and move forward with clarity.
FAQs
How should I estimate rent for a 3-bedroom in Fountain?
- Build a comp set within 5 to 10 miles, adjust for condition, parking, utilities, and proximity to Fort Carson, then use 25th, 50th, and 75th percentile rents to set conservative, median, and aggressive lines.
What vacancy rate fits Fountain underwriting?
- A 5 to 10 percent baseline works for small residential rentals; plan for faster lease-ups in late spring and summer and longer marketing times in late fall and winter.
How does Fort Carson affect my rental risk?
- It supports steady demand, especially during PCS season, but you should align lease expirations with peak months and keep reserves for occasional off-season turnover.
What property management fee should I expect locally?
- Full-service single-family management typically ranges from 7 to 12 percent of monthly rent, while small multifamily often runs 6 to 10 percent depending on service scope.
How much should I budget for maintenance on a 20 to 30-year-old home?
- Start with 5 to 10 percent of gross rent annually and set a separate capex reserve for larger lifecycle items like roofs, HVAC, and major appliances.
Are furnished or short-term rentals near the base a good idea?
- Some military and relocation tenants prefer furnished options, but always check local ordinances and HOA rules before pursuing short-term or furnished strategies.
