Is Denver a Good Market for Rental Property Investments?
A third of the metro Denver area is comprised of rental properties. Since housing inventory is scarce, prices are going up much faster than wages, and the younger population is more comfortable renting than owning, therefore the Denver housing market is seeing a rapid rise in its rental market. The sheer demand for housing stock is making it profitable to break up large homes into multiple apartments.
Denver remains more expensive than other Colorado cities, including Fort Collins and Colorado Springs, and other major metro areas such as Phoenix and Charlotte, but considerably below California-based rent leaders and more. If Forbes Magazine could recommend this as a Denver real estate market investment strategy, which it has, it can be a serious consideration this year and next.
Forbes says that any single-family home in the metro Denver housing market could be considered a good rental property due to the rapid rise in home prices, even though prices have lowered somewhat the past two months. Metro Denver has a large student population for rental homes. 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.
There are dozens of colleges in the metro Denver area. Four-year colleges are abundant, and community colleges are even more plentiful. You could invest in rental real estate near any of these colleges, knowing that you could rent or sell to people that simply want to live in the area if student demand backs off. The August 2022 Rent Report from Apartment List reveals that Denver rents increased over the past month.
Denver rents have increased 0.8 percent over the past month and are up sharply by 8.8 percent in comparison to the same time last year. Currently, median rents in Denver stand at $1,443 for a one-bedroom apartment and $1,785 for a two-bedroom unit. This is the sixth straight month that the city has seen rent increases after a decline in January. Denver’s year-over-year rent growth lags the state average of 10.0 percent, as well as the national average of 12.3 percent.
Throughout the past year, rent increases have been occurring not just in Denver, but across the entire metro area. Ten of the largest cities in the metro area have all seen price increases. If you choose to invest in rental properties, which currently seems like a good move, be sure to do your due diligence. Check the renter’s employment, bank account, previous rental,
criminal record and get referrals.