A third consecutive month of declining national rents isn’t just a renter-friendly data point, it also signals changes that Colorado landlords should prepare for. While Colorado remains one of the stronger rental markets in the West, shifts in nationwide trends tend to ripple into the state within a few months.
Here’s a deeper look at how this could affect Colorado property owners.
1. Vacancies May Last Longer
When rents cool nationwide, renters have:
- More choices
- More negotiating power
- Less urgency to secure a unit quickly
Even in high-demand Colorado cities like Denver and Boulder, landlords may see units sitting longer, especially:
- During winter months
- In older buildings without recent upgrades
- In neighborhoods with a lot of new construction
Longer vacancies often cost more than slightly lowering rent, so strategic pricing becomes critical.
2. Rent Increases May Need to Be Smaller (or Put on Pause)
With national rent trends leveling off, aggressive rent hikes become harder to justify. Colorado renters are already price-sensitive due to rising costs of living. As a result, landlords may need to:
- Limit annual increases
- Offer renewal incentives
- Avoid pricing themselves out of the local market
In other words: maintaining occupancy may be more profitable than pushing for max rent.
3. More Tenants Will Expect Incentives
To stay competitive, Colorado landlords may start offering:
- Reduced or waived application fees
- Lower security deposits
- Free parking or storage
- One month free on a 12–15 month lease
These incentives are becoming more common nationwide, and Colorado tends to follow suit — especially in Denver’s luxury apartment market, which has seen a surge in supply.
4. Tenant Retention Becomes More Valuable
Keeping a good tenant for multiple years is often more profitable than constantly turning over units. In a softening market, retention strategies become crucial:
- Improve communication and responsiveness
- Make small but meaningful upgrades (lighting, paint, appliances)
- Avoid unnecessary rent hikes
- Offer early-renewal rewards
- Stable, long-term tenants protect landlords from vacancy losses.
5. Older Units May Need Upgrades to Compete
Colorado’s rental inventory includes a mix of new luxury builds and older homes/apartments. When rents fall, renters become more selective, meaning older units may need:
- Updated flooring
- Modern appliances
- Fresh paint
- Better lighting
- Smart thermostats (popular in Colorado’s climate)
Small improvements often lead to higher tenant satisfaction and shorter vacancy times.
6. New Construction in Colorado Increases Competition
Cities like Denver, Aurora, and Colorado Springs have seen a boom in multi-family developments. When national rents dip, these new buildings often lower prices first, pulling potential tenants away from smaller landlords.
This means:
- Landlords must price competitively
- Amenities matter more
- Marketing and presentation become crucial
- Listings need high-quality photos, detailed descriptions, and quick response times.
7. Cash Flow Planning Becomes More Important
If rent growth slows or flattens, landlords may need to:
- Recalculate cash flow
- Adjust investment strategies
- Set aside more reserves
- Reevaluate debt and mortgage plans
A cooling rental market doesn’t mean income loss, but it does mean more careful financial planning.
8. Opportunity for Landlords to Expand
For investors, falling rents combined with longer vacancies can create buyer’s market conditions. Slower rent growth sometimes motivates owners to sell, creating opportunities for:
- New acquisitions
- Portfolio expansion
- Value-add investments
Colorado’s long-term demand remains strong, especially along the Front Range, so strategic investors can benefit.
What Colorado Landlords Should Focus on Now
To stay competitive, landlords should:
- Prioritize tenant retention
- Keep rent increases reasonable
- Improve unit quality where possible
- Offer small incentives to reduce vacancy
- Stay informed on local market shifts
- Prepare financially for slower rent growth
Colorado remains a desirable place to live, but national trends are signaling a more balanced market — one where landlords must adapt to maintain strong occupancy and steady income.
Key Indicators
In 2025, the metro Denver, CO rental market saw a surge in new supply, roughly 20,000 new apartment units delivered in 2024, which caused vacancy rates to rise and rents to drop.
As of early 2025, vacancy rates reportedly reached around 7%, the highest level in many years, creating a strong “renter’s market.”
For single-family rental homes in Denver, growth has moderated; one recent report projects ~2.7% growth for 2025, down from ~4.5% in 2024.
For multifamily units (apartments), rent growth has slowed considerably, some reports suggest minimal growth, or even contraction, in parts of 2025.
Developers and builders are pulling back: new multifamily construction starts have dropped significantly in 2024, which suggests fewer added units coming online in the near future.
Forecast 2025–2026: What Landlords in Colorado Might Expect
- Stabilization & Gradual Recovery of Rents
As supply growth slows (fewer new units delivered 2025 and beyond), pressure from oversupply should ease. That means rents likely stop falling, and may begin rising modestly again.
For many landlords, especially in suburban or mid-tier neighborhoods (outside the hottest metro submarkets), rents could increase by 2–3% by late 2026.
For newer or luxury units, demand may rebound sooner, especially if interest rates shift, employment grows, or migration continues into the Denver/Front Range corridor.
- Stronger Occupancy, Less Vacancy Over Time
Because new supply is slowing sharply, absorption (people renting) may begin catching up to inventory. That implies vacancy rates could drop from recent peaks toward more “normal” levels by 2026.
This shift could make it easier for landlords to lease units without heavy discounting or concessions, improving cash flow stability.
- Differentiated Market: Submarkets Matter More Than Ever
Suburban areas (rather than central city) may outperform. For example, outlying suburbs or counties near Denver but with less new construction are expected to do better in rent growth and occupancy.
Mid-tier and “affordable” rental segments may see steadier demand compared to high-end/luxury apartments, where supply and competition tend to be higher.
- Increased Importance of Tenant Retention, Upgrades, and Smart Management
In a softer rental market, landlords who focus on maintaining quality — reasonable rents, well-maintained properties, responsive management — are likely to fare better than those who rely purely on market-wide demand.
Offering small incentives (e.g. flexible lease terms, small upgrades) can help fill units sooner without drastically reducing rents.
For older properties or those in less desirable submarkets, modest investments (cosmetic upgrades, improved amenities) could offer a better return, especially as supply tightens.
Risk Factors to Watch
If too many landlords and developers try to “wait out” the slump by keeping units empty, oversupply may linger, prolonging concessions and lower rents.
Macro-economic factors: employment trends, mortgage rates, migration patterns, if these shift negatively (e.g. job loss, rising rates), demand may weaken and slow the forecasted rebound.
Local regulation, taxes or zoning changes could also influence supply/demand, affecting profitability for smaller landlords, especially.
What This Means — Broad Takeaway for Colorado Landlords
- If you own property in Denver or along the Front Range today, you should likely expect a transition over the next 18–24 months:
- The worst of rent declines and high vacancy is probably behind us.
- By 2026, a modest rent recovery and improved occupancy are likely, but this won’t look uniform across all neighborhoods or unit types.
Landlords who act strategically, pay attention to submarket dynamics, invest in upkeep, and manage tenants proactively, are positioned best for stable returns.
For investors considering new purchases: the coming stabilization could offer a relatively favorable entry point (less competition, more stable yields), though long-term success will depend on location and management quality.
