Just as hot as the Denver Real Estate Market is, so is the rental market. In an article out today from the Denver Post, The average rent for apartments in metro Denver rose 7.1% from the second quarter of last year to the same period this year. It was the highest growth rate reported during any quarter since the third quarter of 2011, when average rent grew 8.5%. During the second quarter of this year, the average rent in metro Denver rose $65 to $979 from last year's second-quarter average rent of $915. "You have to go back to the days of the dot-com boom to see lower vacancy rates than what we're seeing right now," said Ryan McMaken, spokesman for the Colorado Division of Housing. Click here to read the full article.
What does this mean to Denver residents and prospective residents? Lots actually. Here is how I see these rising rents impacting all types of Denver residents in the coming years.
Renters - If you intend to keep renting, and can lock in your rental terms for awhile, do it. Rents are going to keep increasing, no doubt about that. Maybe it is time to consider buying.
First Time Home Buyers- Did you know that in most cases, you can own for less than you can rent? With interest rates around 3.75% right now, borrowing money has never been cheaper. And with the average rent in Denver going from $915 to $979, just imagine how much the average rent will be 3 years from now? Your mortgage will stay the same though, so in ways, there is actually more security in buying right now than renting.
Move Up Buyers - If you aren't ready to sell yet, but would love to take advantage of these insane rates to get a bigger and nicer home for the same monthly payment you are making now, then perhaps it is time to consider renting out your home and finding a new one to buy.
Sellers - There is a good chance that if you spoke to an agent about selling last year, the answer was you didn't have enough equity to make it worthwhile. Well guess, what? Times have changed and that may no longer be the case. The inventory of Denver homes is the lowest we have seen in a long time and homes are selling very quickly. Lots of the competition from last year has been rented out making supply diminished. If you have an investment property you are ready to unload, or ready to move up, now is definitely the time to take action.
Investors - Have you ever thought about investing in Real Estate but didn't think you could make the numbers work? With incredibly low interest rates for investment properties, we are seeing mid 4's, and ever increasing rental rates, buying rental property has never made more sense. When I bought my first duplex, my interest rate was 6.5%. So imagine my joy when I refinanced for 4.5% and the rents I charged increased by $600. There is money to be made in Real Estate right now and we can certainly show you how.
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