Is Denver a Good Place to Invest In Real Estate? Now that you know where Denver is, you probably want to know why we’re recommending it to real estate investors. Investing in real estate is touted as a great way to become wealthy. Many real estate investors have asked themselves if buying a property in Denver is good investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead.
Although, this article alone is not a comprehensive source to make a final investment decision for Denver, but we have collected ten evidence based positive things for those who are keen to invest in the Denver real estate in 2020. Let’s take a look at some factors that could make 2020 a good year to invest or buy a home in the Denver real estate market.
1. Limited Room to Grow
Many of the fastest growing markets in the US are along the Front Range, a part of the Southern Rocky Mountains. While there are houses in the hills, it is a lot harder to build on mountainous landscape than flat plains. In Denver’s case, the massive national forests and Rocky Mountain Park to the west of Denver and its suburbs prevent expansion of the Denver housing market in that direction. This keeps home prices higher than they’d be in places like Dallas.
2. Denver’s Quality of Life
We can joke about the people who moved to Colorado decades ago, inspired by the movie “Rocky Mountain High”. We’re not going to joke about the over-hyped medical marijuana industry there today. However, U.S. News and World Report listed Denver the third best place to live in the US, while it ranked the 37th best place to retire. The area was a little lower on value than many like, but it ranked high on jobs, quality of life and desirability. That isn’t enough on its own to draw huge numbers of people to the Denver real estate market, but it is a factor. We’ll address the biggest factor pulling people to the Denver housing market next.
3. Jobs, Jobs, Jobs
Jobs are a major reason why people move to Denver in the first place. The area’s unemployment rate is less than 3%. In fact, Denver’s unemployment rate has been well below the national average for years. That explains why Denver is one of the top cities for in-migration, attracting people from all over the state as well as the country.
4. The Strong Tourism Market
Denver is well known for its proximity to the Rockies. Other attractions in the area include but are not limited to the Denver Zoo and the Denver Botanic Gardens. Many of those 30 million tourists would love to have rented a house or apartment for their visit instead of a hotel. Then there’s the business traveler. Denver hosts around 80 conventions a year, too.
Whether someone is staying for a week for a convention or working a contract job in the tourism industry, this drives demand for short-term rentals that can be incredibly profitable. Renting on sites like AirBNB is legal if you have a business license, though around half of the AirBNB rentals are thought to be violating that rule. Denver is particularly progressive with allowing people to rent out their homes and apartments on AirBNB, though landlords may not agree with it.
5. Known Areas of Redevelopment
You don’t want to invest in the Denver housing market and end up losing money because the neighborhood is going downhill. Conversely, areas slated for redevelopment will almost certainly go up. And Denver has known and planned for areas of redevelopment. Downtown Denver saw multiple infill projects downtown ten years ago. Redevelopment is planned around Elitch Gardens today.
6. Strong ROI From Denver Investment Properties
The median home price is just under $400,000. That’s a steal for the refugees from California, but the sheer numbers of them coming in is pricing locals out of the housing market. Median monthly rent here – and that includes one bedroom apartments – is around $1100 a month. Note that you could get much more for a spacious single family home for rent or large condo. With a 3 bedroom detached single family home, you could receive well over $2000 per month in rent. You’ll find strong ROI numbers for the Denver real estate market.
7. Demographic Momentum
At first glance, the average age of 36 for residents versus 40 for the national average doesn’t sound too promising. However, this long established city has already been noted as a great place to retire. That pulls the average age up. The coolness factor and job market attracts equal numbers of young adults. That is why Millennials make up about 22% of Denver’s population.
And given the job market and quality of life, they’ll probably stay here to raise families, generating more demand for the Denver housing market. Generation X made that decision, too, which is why roughly a quarter of residents are under the age of 20. That will propel the Denver real estate market for decades to come.
8. The Large, Diverse College Market
The college market presents a unique opportunity for landlords. There is a constant stream of people who will only rent, unless they choose to stay after graduation. They may rent a while longer before feeling secure enough to buy a house. Buying investment real estate in a college town is high-risk. After all, when a college like Evergreen State that scares off students or simply fails to attract them like many classic, private liberal arts schools who found themselves rendered redundant after brand name schools opened their doors, there’s less demand for the rental or the house as a permanent residence.
You don’t have that problem in Denver, since there are so many colleges in the Denver area. Schools range from the massive community college network to the 400 student Bel Rea Institute of Animal Technology. American Sentinel University in Aurora is home to 2600 students, while Metropolitan State College of Denver has more than 20,000 students.
The Colorado School of Healing Arts has only 100 students, while Colorado Christian University has more than 7000. Yes, the Denver real estate market for those who want to cater to students is diverse. You could invest in rental real estate near any of these colleges, knowing you could rent or sell to people that simply want to live in the area if student demand slacks off.
9. It Is Relatively Landlord-Friendly
Colorado is relatively landlord-friendly; compare it to the West coast, and it is a landlord’s dream. You don’t have to give tenants notice that you’re entering a property. You can quickly begin evictions if they haven’t paid the rent. That protects your investment in the Denver housing market. There’s no limit on late fees. There are no state laws that prevent you from rekeying the locks after evicting them.
If they violate the lease, give them formal notice. The tenants then have 72 hours to correct the issue or move out. If they don’t comply with notices, then you can go to court. If the court agrees with you, the sheriff gives the tenants 48 hours to move out before forcing them out.
10. Denver is a Growing Rental Market
Since housing inventory is scarce, prices are going up much faster than wages, and the younger population is more comfortable renting than owning, the Denver housing market is seeing a rapid rise in its rental market. Sheer demand for housing stock is making it profitable to break up large homes into multiple apartments. If Forbes could recommend this as a Denver real estate market investment strategy in 2016, it can be seriously considered today. They said that any single family home in the Denver housing market could be considered a good rental property due to the rapid rise in home prices.
Reprinted from an article published by the Norada Group.
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