Are you looking to invest in Denver real estate?
A rental property can be a great way to earn passive income and create wealth through property appreciation.
Now, different locations will have different potentials. That's why it's important to choose the right location for real estate investing. Choosing the right location enables you to earn a good return on investment.
Denver real estate is a great investment. The economy is diverse and strong. There are also many tourist attractions.
Rent rates are increasing year over year. The city's quality of life keeps attracting new residents. So, for prospective investors, Denver real estate can be lucrative.
In this article, we at McGuire Property Management will go over the top reasons to buy an investment property in Denver, Colorado. You'll learn about the major factors that make this area ripe for high return on investment.
Why Invest in Denver, CO Rental Properties
1. The economy is strong and diverse
Denver's economy is awash with job and business opportunities. Forbes actually named it as one of the best 5 cities for careers and business in its latest rankings.
Although COVID-19 has certainly had a huge impact on the economy, it has tried to stay put. However, the unemployment rate still continues to be lower than that of the national average.
The economy of the Mile High City is quite diverse and made up of varying industries. Historically, the city's economy has been dominated by the oil and gas sector. But now, the local economy seems to be driven by the education and technology sectors.
A growing and diverse economy is key to the success of any real estate market. So, if you are thinking of investing in Denver, now is the time.
2. The city is home to one of the largest populations in the country
Denver is home to one of the top 20 largest populations in the country. The recent Census Bureau estimates the city's population to be 705,576. With this number of residents, it's the 19th most populous city in the U.S., the 5th most populous state capital, and the most populous city located in the Mountain states. Moreover, it continues to grow, albeit slowly.
So, what does a large population mean? A large population is usually accompanied by increased demand for rental housing. And this is true in the city's housing market. About half of the population lives in rental housing, according to NeighborhoodScout.
3. Demand for rental housing continues to increase
As more and more people move to Colorado, one thing's for sure – they will need somewhere to live!
This presents a huge opportunity for investors looking to invest in rental housing. Single-family rental homes are particularly in high demand.
Besides the high demand for rentals, rent prices are going up in more affordable areas. This is according to a report by Apartmentguide.com.
4. The housing market in Denver is a buyer's market
First things first, what is a buyer's market? This is a market that occurs when the housing inventory is higher than the demand for it.
Currently, the Mile High City's housing market is a buyer's market, according to Zillow. So, as an investor, you'll definitely have an easier time finding the right investment property. Additionally, you'll have an upper hand when it comes to negotiations.
5. Colorado is home to some of the country's top attractions
Colorado is rich in outdoor recreational opportunities. This benefits the state's real estate market in three major ways.
Firstly, it attracts young families that prefer living the outdoor lifestyle into Denver. Secondly, it also draws in both day and night tourists. Thirdly, they make both traditional and Airbnb rentals profitable.
Some popular attractions in Denver include Mount Evans, Denver Botanic Gardens, Denver Zoo, Mount Sneffels, and Rocky Mountain National Park.
According to Denver.org, in 2019, a whopping 17.7 million tourists visited Denver and spent a staggering $17 billion. The spending was mainly on attractions, restaurants, retailers, and accommodation.
So, if you're particularly interested in offering short-term rentals, then you may be able to reap a high return on investment.
6. Colorado is a landlord-friendly state
As a landlord, investing in a landlord-friendly state is crucial for long-term success. It not only ensures a high return on investment, but it also makes investment dealings significantly easier.
Colorado is a landlord-friendly state for a number of different reasons. To begin with, the property taxes are super low. As a matter of fact, the state has repeatedly been ranked among the top 10 lists of states with the lowest property taxes.
Secondly, the eviction process is a cinch. Typically, evictions tend to be costly and lengthy processes. This is, however, not the case in Colorado.
In case of a lease violation, you simply need to notify the tenant of the violation through a proper written notice. However, if the tenant doesn't attend to the violation in 3 days, you have the option to start eviction proceedings against them immediately.
Thirdly, there are no limitations or restrictions on how much of a late fee you can charge your tenants. The same is true when it comes to security deposits. You have a right to charge whatever security deposit amount you see fit.
Also, as a landlord, you won't be required to provide your tenant prior notice before accessing their rented unit.
7. Properties continue to appreciate in values
This is another reason why you should invest in Denver real estate. Regardless of the statistic you look at, the state has one of the highest appreciation rates in the country.
Additionally, the appreciation in property values is driven by several factors. These include the high quality of life, cost of new construction, and growth in local population.
Bottom Line: Why Invest in Denver Real Estate
Now is the time to invest in Denver's real estate, considering the opportunity for high return of investment. Choose the right location and type of property, and your rental business will begin to thrive.
Is this your first time investing in real estate? If so, McGuire Property Management can help. We understand the local market dynamics and can help you make an informed decision.