As a Denver property management company, we have the opportunity to see what many others cannot. We are “on the ground”, every day, constantly evaluating the latest shifts in the Denver rental market. Here’s what we see going on now:
– There is a lot of supply currently when it comes to condos and apartments. New construction outside of Denver – in the near-Denver suburbs – is creating excess supply and depressing the prices of many condo units; particularly 1 and 2 bedroom units. This supply, of course, includes new apartment complexes. We caution our prospective investor clients to take this into account when buying new units.
– Single-family home rentals continue to be a strong investment in many of the cities surrounding Denver. Pricing has remained steady for single family homes from 2015-2017 and we do not see this changing soon, as there is not an overwhelming supply of single family home rentals and those tenants tend to stay in the properties longer (hence fewer properties on the rental market at any given time.) We typically advise our clients to come to us with a single-family home they are considering purchasing as a rental and we can let them know what condition it will need to be in, what it will likely rent for and how many days on the market they can expect.
– Despite what many of our clients and prospective clients hear and/or read, rental prices in Denver are not “skyrocketing”. Sometimes, news stories take data and present it as if it is true for every property, in every corner of the greater Denver market, and this simply is not the case. Rental pricing varies wildly in Denver based on the specific part of town, the time of year, and of course the property itself (bedrooms, bathrooms, size, square footage, amenities such as parking, etc.)
Even with all the variables in the Denver rental market, we feel this is a very strong market in which to purchase long-term rental properties. The renter-demographic in greater Denver is excellent, with many professionals renting with high income, high credit scores and who generally make excellent tenants.
As with every rental purchase, however, it’s not “just about the numbers”! We have seen a lot of clients pick up properties for very low prices, but in areas where it’s near impossible to find qualified tenants. If you buy houses like this, because they are cheap and the numbers look good on paper, not even Real Estate Solutions will be able to help you:
There are a lot of factors that go into buying and owning a successful rental property. The numbers certainly have to work out, including the mortgage payment, taxes, HOA, property management fees, vacancy time, and anticipated repair expenses. Those numbers, however, never exist in a vacuum: all the expenses and anticipated income of a rental property are going to be specific to the area of the rental and the condition of the rental.
Ultimately, in Denver or in other rental markets, potential investors are not looking for the cliche’ “diamond in the rough” – what you really want, is to find the “rough in the diamonds” – the property that’s in a great area, but maybe needs a little work to be rent ready.