Naperville, IL vs Denver, CO: Which Is the Better Investment?
Compare Naperville (cap rate 7.2%) vs Denver (cap rate 5%). Rent, appreciation, vacancy, and market health analysis.
Naperville Price
$475K
Denver Price
$580K
Naperville Cap Rate
7.2%
Denver Cap Rate
5%
Naperville Rent
$2,850/mo
Denver Rent
$2,400/mo
Naperville Growth
1.2%
Denver Growth
1.5%
| Naperville | Metric | Denver |
|---|---|---|
| $475K | Median Price | $580K |
| $2,850/mo | Median Rent | $2,400/mo |
| 7.2% | Cap Rate | 5% |
| 4.8% | Appreciation | 2.8% |
| 3.2% | Vacancy | 6.1% |
| 149,540 | Population | 715,522 |
| 1.2% | Pop. Growth | 1.5% |
| 9/10 | School Rating | 6/10 |
AI Comparison Verdict
Naperville, IL
Strong Buy
RecommendedDenver, CO
Neutral
Naperville ($475K median, 7.2% cap rate) vs Denver ($580K median, 5% cap rate). Naperville offers higher rents with 1.2% population growth, while Denver provides higher appreciation with 2.8% appreciation. Naperville scores 67/100, outperforming Denver with stronger cash flow potential.
Summary
Naperville ($475K median, 7.2% cap rate) vs Denver ($580K median, 5% cap rate). Naperville offers higher rents with 1.2% population growth, while Denver provides higher appreciation with 2.8% appreciation. Naperville scores 67/100, outperforming Denver with stronger cash flow potential.
Bull Case
- 1
Naperville, IL: Strong population growth of +1.2% annually drives sustained rental demand and reduces vacancy risk, creating favorable conditions for landlords.
- 2
Denver, CO: Strong population growth of +1.5% annually drives sustained rental demand and reduces vacancy risk, creating favorable conditions for landlords.
- 3
Naperville, IL: Above-average cap rate of 7.2% generates strong cash flow from day one, providing a buffer against expense increases and vacancy periods.
- 4
Denver, CO: 2.8% annual appreciation combined with principal paydown creates compelling total returns even with moderate cash flow.
Bear Case
- 1
Naperville, IL: Rising interest rates increase carrying costs — a 1% rate increase on a $380K loan adds ~$317/month to mortgage payments, compressing cash flow.
- 2
Denver, CO: Rising interest rates increase carrying costs — a 1% rate increase on a $464K loan adds ~$387/month to mortgage payments, compressing cash flow.
- 3
Naperville, IL: Extremely tight inventory (1.8 months) may force overpaying, eroding cap rate below the 7.2% market average.
- 4
Denver, CO: Increasing new construction permits could add supply, pushing vacancy above the current 6.1% and pressuring rents downward.
Key Risks
- !
Interest rate risk: refinancing in a higher-rate environment could eliminate positive cash flow on leveraged properties, requiring additional capital reserves.
- !
Interest rate risk: refinancing in a higher-rate environment could eliminate positive cash flow on leveraged properties, requiring additional capital reserves.
- !
Local economic concentration risk — downturn in primary industries could rapidly increase vacancy and reduce rental rates.
- !
Above-median crime index (42) in certain neighborhoods may impact tenant quality, insurance costs, and property appreciation trajectory.
Final Verdict
Naperville, IL edges ahead in our analysis. Naperville scores 67/100, outperforming Denver with stronger cash flow potential. Ultimately, the best choice depends on your investment timeline, risk tolerance, and portfolio allocation.
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