There has been a shift in the Denver real estate market. In the early part of 2010 we had a Seller’s market in March and April which shifted to a Buyer’s market in May due to the government incentive program. In the months that have followed, prices have dropped due to the reduced demand for single family homes. Prices may continue to slip or at least stay the same for the rest of this year.
This buyer’s market is now a perfect opportunity for investor purchasers to pick up rental property since the market is now favoring them. Another positive trend is that vacancies of 1 to 4 unit homes are currently at 3.8%, which is at a near all-time low. Single family homes are the easiest to rent and, while not measured separately, are certainly below the 3.8% vacancy mark.
The conclusion is that it’s a great time to be a landlord. Units are full and landlords can have the upper hand with tenants. In some areas, we have also seen rents increasing. Feel free to ask some of your investor friends to find out how they feel their investments are trending.
High occupancy in the rental-housing market is being driven by economic concerns like:
Job security or reduction in gross family income
Consumers feel it’s less risky to rent a home than to buy one
There are large impediments to buying new homes with the new lending qualifications.
So what if you are convinced now to enter the world of investment property – what is your next step. First talk to a knowledgeable lender and see if you are able to qualify for an investment property. It is relatively easy to qualify for a loan for a rental property. The basic requirements are 20% down, a job, and a 680 FICO with no major hits on the credit report. If you have this profile or better you should be able to get a loan.
The bottom line is this. Rates are at all-time lows. It can’t really get better than this!