Low vacancy rates are making both investment properties and home ownership of Denver real estate more attractive. Within the nationwide market for real estate, Denver stands above the rest in terms of performance for investment and residential real estate. Our great urban plan in Downtown Denver, transportation network, growing business base, low unemployment and of course the amazing 300+ days of sunshine also make this a wonderful place to live. Throughout the Downtown Denver markets the popularity of our city has been driving vacancy rates lower creating two audiences who benefit from home ownership.
Low vacancy rates in Denver are have created an increase in rental prices. As reported in the Examiner article Vacancies scarce in Denver rental houses, rents rise”…
“Vacancies in for-rent condos, single-family homes, and other small properties across metro Denver rose slightly during the fourth quarter although the market remained tight with a rate of 2.1 percent.”
For our investor clients Denver offers a very unique opportunity to find properties with attractive capitalization rates. The capitalization rate (or “cap rate”) is the ratio between the net operating income produced by an asset and its capital cost (the original price paid to buy the asset) or alternatively its current market value. The rate is calculated in a simple fashion as follows: Annual net income is getting a boost from low vacancy rates driving up the rental rates generated while low interest rates are reducing the financing cost. Two things that help investors realize higher returns and early payback.
Of course investors aren’t the only one who benefits. Those who currently rent and are facing higher and higher monthly payments are able to take advantage today’s low interest rates to make home ownership more attractive.
Downtown Denver condo and Downtown Denver loft home owners are enjoying a more comfortable monthly budget and the peace of mind that they don’t have to worry about annual rent cost increases.
We love our city… and so do many others. As Denver’s population continues to grow vacancies may continue to tighten and rents may continue to increase. Call today to learn more about market trends for Denver investment or home ownership opportunities in your neighborhood.