https://www.mashvisor.com/blog/rental-property-calculator/2017 was an extremely strong year for the Denver real estate market for both traditional and Airbnb investment properties. In fact, according to Data from Airbnb, among all Colorado communities, Denver had the highest figures with Airbnb last year – reporting 325,000 visits and a total income of $51 million generated for the hosts. Denver real estate investors will be especially thrilled to hear that the market continues its hot streak in 2018!
So, if you are looking for a new city to diversify your real estate investment portfolio, you should definitely consider investing in Denver, CO. In this article, we’re providing you with information regarding why and where to invest in the Denver real estate market, based on data analysis computed by Mashvisor’s rental property calculator.
What Makes Denver, CO a Hot Real Estate Market?
Location, location, location! Every smart real estate investor knows that location plays a major role in a successful real estate investing career. So, what makes the Denver real estate market an excellent location?
Growing Population
Nothing can be better for any housing market than a strong and steady economy, which is the first thing real estate investors take into consideration before buying an investment property in a certain location. The Metro Denver area has a very strong economy for several reasons. First, the city is drawing new residents in like a magnet! Denver real estate has a population close to 2.8 million residents. Moreover, according to the Economic Development Corporation, Metro Denver, this population is expected to grow to 3.3 million by 2020.
Why are so many people moving to Denver? The city supports an active lifestyle with hiking, biking, trail running and plenty of health food stores and restaurants to match. In addition, families seek the Denver area for its proximity to downtown and high-quality schools and family-friendly atmosphere. This is great news for Denver real estate investors, especially those investing in single-family and multi-family homes for rent.
With a growing population, Denver real estate investors have a large pool of rental population and, thus, are guaranteed to find tenants to rent their investment properties. Furthermore, as more and more people move to the city, demand for real estate investing will increase, providing new investment opportunities for beginner and experienced real estate investors in the Denver real estate market!
Strong Job Market
The second reason for the strong economy in Denver is the city’s job market and job growth. The Denver Business Journal ranked Colorado as #1 for job opportunities, offering an unemployment rate of less than 3%! This strong job growth leads to increasing rents which fuels the demand for real estate investing.
This is great for Denver real estate investors where almost half of the population rents. Not only does this offer real estate investors a large pool of potential tenants, but these potential tenants are in a solid job market meaning they are financially able to pay their rents on time. In addition, in the Denver real estate market – where the population, job market, and demand for real estate investing is growing – property investors can charge more rent, leading to a higher cash flow and better rate of return on investment. This should be enough to motivate investors into entering the Denver real estate market.
Tourism
Denver, also known as the Mile High City, lies at the foot of the Rocky Mountains. The capital of Colorado is known for its outdoor entertaining opportunities that not only pulls families who prefer an outdoor lifestyle to move to the city, but this is also a major attraction for tourists! In fact, over 30 million tourists visited Denver in 2016. Other major attractions in the city include Denver Zoo, Denver Botanic Gardens, Mount Evans, and Rocky Mountain National Park.
These attractions are an important driver of the Denver real estate market. The tourism industry made Denver one of the best real estate markets not only for traditional real estate investors but also for those investing in short-term Airbnb rentals. However, one thing Denver real estate investors should keep in mind is the Airbnb laws and regulations in the city. Denver passed an Airbnb law last year that allows short-term rentals only in your primary residence. Moreover, Airbnb hosts in the Denver real estate market must obtain a valid short-term rental license and pay taxes.
Now that we’ve covered the main reasons why Denver, CO is a hot real estate market in 2018, let’s talk numbers! Here’s a quick summary of the Denver real estate market, in addition to a list of the best neighborhoods in which real estate investors should consider when searching for an investment property to buy in the city, as computed by Mashvisor’s investment property calculator.
A Quick Summary of Denver Real Estate Market
Click here to start looking for and analyzing different investment properties in Denver, Co!
The Best Neighborhoods of Denver Real Estate Market:
Denver Real Estate Market – Central Business District
- Median Property Price: $524,950
- Traditional Rental Income: $2,120
- Traditional Cash on Cash Return: 1.9%
- Traditional Cap Rate: 1.9%
- Airbnb Rental Income: $3,284
- Airbnb Cash on Cash Return: 4.03%
- Airbnb Cap Rate: 4.03%
- Occupancy Rate: 59%
Denver Real Estate Market – Union Station
- Median Property Price: $785,691
- Traditional Rental Income: $2,826
- Traditional Cash on Cash Return: 1.61%
- Traditional Cap Rate: 1.61%
- Airbnb Rental Income: $3,084
- Airbnb Cash on Cash Return: 1.93%
- Airbnb Cap Rate: 1.93%
- Occupancy Rate: 44%
Denver Real Estate Market – Capitol Hill
- Median Property Price: $265,000
- Traditional Rental Income: $1,578
- Traditional Cash on Cash Return: 2.78%
- Traditional Cap Rate: 2.78%
- Airbnb Rental Income: $3,044
- Airbnb Cash on Cash Return: 8.5%
- Airbnb Cap Rate: 8.5%
- Occupancy Rate: 62%
Denver Real Estate Market – North Capitol Hill
- Median Property Price: $539,450
- Traditional Rental Income: $2,030
- Traditional Cash on Cash Return: 1.42%
- Traditional Cap Rate: 1.42%
- Airbnb Rental Income: $2,342
- Airbnb Cash on Cash Return: 2.6%
- Airbnb Cap Rate: 2.6%
- Occupancy Rate: 85%
Denver Real Estate Market – Congress Park
- Median Property Price: $869,000
- Traditional Rental Income: $2,461
- Traditional Cash on Cash Return: 1.16%
- Traditional Cap Rate: 1.16%
- Airbnb Rental Income: $4,334
- Airbnb Cash on Cash Return: 3.23%
- Airbnb Cap Rate: 3.23%
- Occupancy Rate: 68.09%
Denver Real Estate Market – Chaffee Park
- Median Property Price: $379,000
- Traditional Rental Income: $1,828
- Traditional Cash on Cash Return: 2.64%
- Traditional Cap Rate: 2.64%
- Airbnb Rental Income: $3,990
- Airbnb Cash on Cash Return: 7.38%
- Airbnb Cap Rate: 7.38%
- Occupancy Rate: 63%
Denver Real Estate Market – Gateway-Green Valley Ranch
- Median Property Price: $357,000
- Traditional Rental Income: $1,637
- Traditional Cash on Cash Return: 1.61%
- Traditional Cap Rate: 1.61%
- Airbnb Rental Income: $3,045
- Airbnb Cash on Cash Return: 5.45%
- Airbnb Cap Rate: 5.45%
- Occupancy Rate: 18%
Denver Real Estate Market – Virginia Village
- Median Property Price: $440,000
- Traditional Rental Income: $1,770
- Traditional Cash on Cash Return: 1.91%
- Traditional Cap Rate: 1.91%
- Airbnb Rental Income: $2,599
- Airbnb Cash on Cash Return: 3.72%
- Airbnb Cap Rate: 3.72%
- Occupancy Rate: 70%
Denver Real Estate Market – Athmar Park
- Median Property Price: $275,000
- Traditional Rental Income: $1,811
- Traditional Cash on Cash Return: 3.96%
- Traditional Cap Rate: 3.96%
- Airbnb Rental Income: $3,969
- Airbnb Cash on Cash Return: 11.5%
- Airbnb Cap Rate: 11.5%
- Occupancy Rate: 67%
Sign up for Mashvisor now to get access to our investment property calculator as well as our property finder tool to help you find and buy the best Denver investment properties.
Denver Real Estate Market – Final Words
Real estate investing can be your way to riches and fortune as long as you invest in the best locations! Denver real estate is one of the top markets for a real estate investor looking to buy an investment property and start a real estate investing business.
The above-mentioned neighborhoods are those in which property investors will find investment properties in Denver, CO that are worth their money and generate a high return on investment, as calculated by Mashvisor’s investment property calculator. How to find the best investment property in these neighborhoods? Use Mashvisor’s Investment Property Finder – a powerful and heavily customizable search tool that allows you to search for investment properties based on specific criteria, such as finding properties of a certain type, in a certain neighborhood, or with a certain Cap Rate.
To start your 14-day free trial with Mashvisor and subscribe to our services with a 20% discount after, click here!