According to real estate experts, there has never been a better time to invest in rental homes in Denver than the present. The city has seen unprecedented growth when other areas have experienced shrinking job opportunities and numbers.
As the decision to invest in a rental property and become a landlord is a crucial one, investors are cautioned to enter such transactions with their eyes open and to understand the ramifications of such investments.
Are you looking to invest in real estate in Denver? Here are some tips you should know:
Going It Alone Is Not Your Only Option
Denver is not unique in the real estate investment market as it also presents landlords with some challenges. These include less-than-ideal tenants who do not pay rent on time or cause unnecessary property damage. Much like other cities, not every property is a wise investment for a rental income.
The risks above may be mitigated in case professionals in property management are recruited. The screening of potential tenants’ applications is done to ensure the accuracy of the details and information. Knowledgeable company agents can facilitate the process and also ease the challenges for landlords. Hiring experts in property management in Denver could certainly be beneficial in terms of time and possible future struggles.
Another issue that landlords often complain about is dealing directly with tenants. Some do not like such interactions. Property owners sometimes form personal relationships with renters, complicating matters when a dispute or other problem arises. Property management company agents form a buffer between landlords and tenants, removing potential friction from the relationship.
Properties advertised for sale in Denver typically remain listed for about a week before being purchased after the owner receives multiple offers. It is currently a sellers’ market as there are more would-be buyers than homes for sale.
While house prices in Denver might be up, there are still bargains to be found. Investors should expect to pay $500,000 on average for a rental property. Rental properties range from studio apartments to elegant large homes and everything in between. Property management companies, including Avison Young, will take on properties of any size and find the owner the right tenants.
Using a reliable realtor makes finding excellent rental property investment possibilities easier than trying to do so independently. These companies have an extensive network and are often aware of listings before they even go live. They also know of people struggling to sell their property who might be open to a reduced offer. Using local expertise is often the difference between finding the right property or being unable to make a sound investment.
Denver is a diverse city, and its neighborhoods vary from urban to upscale and middle- and working-class. Each area has advantages and disadvantages for property investors, which should be weighed carefully when purchasing a rental home.
The most reliable property investment tends to be in middle- or working-class neighborhoods. Here, tenants are looking for long-term rental agreements as they are family units. Parents interested in securing an uninterrupted education for their children will seek suitable accommodation and remain there for several years.
The average rental price in Denver is $1,600, but actual charges depend on the suburb or area. In some areas, rental rates are about $1,000 a month, although renters should expect to pay over $2,000 in others. Buying in upper-class neighborhoods can yield good rental income, but the prices are beyond the means of many would-be tenants.
Understand The Renter Demographic
Some research into the average Denver renter might offer potential investors some insight into what property types are likely to yield a substantial profit. To understand renting in Denver, an investor should access some vital statistics.
Denver’s population is increasing as it is one of the few areas that has seen high job growth figures. People are flocking to the city from elsewhere in Colorado or out-of-state to find work and secure a steady income for their families. Rising job numbers are attributable to several large companies making their head offices or regional headquarters in the city. Its central location makes Denver a viable location proposition.
Denver also has a large student demographic. It is home to several well-known universities, including the University of Colorado, Colorado State University, and the Metropolitan State University of Denver. According to Pioneer Property Management, an influx of students means increased demand for rental properties, such as apartments or homes that function as communes.
Take Advantage Of Tourism
Denver acts as a portal through which many tourists to Colorado arrive in the state. Colorado has many tourist attractions, and millions of visitors flock there every year. Once the travel and tourism industries return to normal after COVID-19, numbers will return to or surpass pre-pandemic levels.
Tourism creates jobs and increased demand for accommodation, making Denver a real estate hotspot with seemingly limitless investment potential. The city’s metropolitan area is expanding according to this increased tourist demand, which has affected Denver’s real estate prices.