The Colorado housing market is a great location for residential real estate investments. And in that market, a real estate investor has many choices of where to invest for good returns. However, one location that you shouldn’t overlook next year is the Boulder real estate market. Boulder has had a tremendously successful rental market in 2019 and that is set to continue in 2020. Let’s dive deeper into the Boulder real estate market forecast for 2020. We’ll cover the key market trends you should know before investing here as well as list the best neighborhoods in Boulder where you should start your investment property search.
Related: Colorado Housing Market 2020: Interview with Real Estate Agent Joe Mivshek
Boulder Real Estate Market Forecast 2020: 5 Trends
Here are a few different trends that are motivating investors to invest in Boulder real estate in 2020.
1. Investing in Boulder Real Estate Will Be Lucrative
The primary goal of investing in any type of real estate is to make a profit. With Boulder investment properties, generating rental income is never an issue. According to Mashvisor’s investment property calculator, the average traditional rental income in the Boulder real estate market is $2,610. Impressively, this figure is merely an average. In the right neighborhoods, a Boulder investment property can earn more than the average rental income in 2020.
Boulder real estate investors can find the most profitable investment properties using Mashvisor’s rental property finder. Click here to learn more about how Mashvisor’s tools can help you achieve your real estate goals.
2. Properties in the Boulder Real Estate Market Will Experience a High Appreciation Rate
Rental income is not the only way that Boulder investment properties can make money in 2020. Properties in the Boulder housing market will benefit from a high real estate appreciation rate. Boulder CO real estate has had high appreciation rates for many years now. According to NeighborhoodScout, properties in the Boulder real estate market have appreciated by over 56% in the last ten years. This places the market in the top 10% for national appreciation rates. Boulder’s status as one of the best markets for appreciation has persisted in 2019. According to Zillow, Boulder house values increased by 3.3% in 2019. For 2020, Zillow estimates Boulder real estate will appreciate by 2.7%.
Related: 5 Best Cities for Real Estate Appreciation in 2020
3. Airbnb Boulder Will Be Legal, But Not for Non-Owner Occupied Rentals
What about an Airbnb Boulder investment for 2020? Are there any Airbnb regulations investors should know about?
For starters, Airbnb is legal in Boulder CO. Hosts of Airbnb Boulder short-term rentals must pay a 7.5% Short-Term Rental Accommodations Tax. They must also obtain a permit and post the permit license number on listing ads.
Unfortunately, however, Boulder Airbnb laws only allow hosts to rent out a primary residence. Non-owner occupied rentals cannot be used as an Airbnb Boulder rental property. Although the average return on investment for Airbnb Boulder real estate investing is actually high (2.2%), this limitation will keep investors out of the local short-term rental market.
4. Boulder CO Real Estate Will Benefit From a Strong Economy
While Airbnb Boulder short-term rentals are not a great real estate investment for 2020, traditional rental properties are. One of the reasons why traditional investment is superb in the Boulder real estate market is the city’s strong economy. For starters, Boulder’s economy grew by 2.7% over the last year. This is considerably more than the 1.6% US average. In the next ten years, Boulder’s job market is predicted to grow by 44.4%, trumping the US average of 33.5%. The city’s average household income has grown by nearly 6% over the last year as well. With further economic growth expected to continue to draw in renters in 2020, the Boulder real estate market will be a great place to invest in traditional rental property.
5. Rental Property Will Be in Demand in the Boulder Housing Market in 2020
The great economy is only one factor that will drive demand in the Boulder housing market in 2020. Boulder is home to the University of Colorado, placing it high among the nation’s best college towns. Boulder has also been named as one of the best cities to live in the country, the healthiest cities in the country, the best cities to raise a family, and the best cities for young professionals.
Related: 8 Reasons to Invest in College Town Properties
Even though many people flock to the city, the high Boulder house prices prevent many from buying. In fact, over 52% of the city’s residents live in a Boulder rental property. So if you can afford to buy a Boulder real estate investment, it will enjoy high demand and low vacancy rates in 2020.
And because of the high prices, the Boulder CO real estate market is currently a cold buyer’s market, according to Zillow. With growing home value, it’s likely to remain a buyer’s market in 2020 as well. While the US housing market is a seller’s market as a whole, Boulder is one of the few markets with conditions that favor buying an investment property. So while Boulder rental properties are in high demand, you won’t face a lot of competition trying to buy one.
Best Neighborhoods in Boulder for 2020
So, where should you invest in the Boulder real estate market? According to Mashvisor’s investment property calculator, the best neighborhoods for Boulder houses for sale in 2020 are CU – Williams Village, Colorado University, University Hill, San Juan del Centro, West Hawthorn, and Parkside.
CU – Williams Village
- Median Property Price: $525,000
- Price per Square Foot: $531
- Price-to-Rent Ratio: 15
- Traditional Rental Income: $2,886
- Traditional Cap Rate / Cash on Cash Return: 3.1%
Colorado University
- Median Property Price: $407,450
- Price per Square Foot: $436
- Price-to-Rent Ratio: 12
- Traditional Rental Income: $2,742
- Traditional Cap Rate / Cash on Cash Return: 2.7%
University Hill
- Median Property Price: $714,750
- Price per Square Foot: $503
- Price-to-Rent Ratio: 19
- Traditional Rental Income: $3,211
- Traditional Cap Rate / Cash on Cash Return: 2.2%
San Juan del Centro
- Median Property Price: $339,180
- Price per Square Foot: $378
- Price-to-Rent Ratio: 15
- Traditional Rental Income: $1,895
- Traditional Cap Rate / Cash on Cash Return: 1.6%
West Hawthorn
- Median Property Price: $800,000
- Price per Square Foot: $645
- Price-to-Rent Ratio: 25
- Traditional Rental Income: $2,706
- Traditional Cap Rate / Cash on Cash Return: 1.5%
Parkside
- Median Property Price: $847,725
- Price per Square Foot: $394
- Price-to-Rent Ratio: 23
- Traditional Rental Income: $3,030
- Traditional Cap Rate / Cash on Cash Return: 1.4%
All in all, the Boulder real estate market will be one of the top markets in Colorado and the US as a whole. With traditional rental profitability, a high appreciation rate, a growing economy, and substantial demand, Boulder investment properties will be successful rentals in 2020.
Ready to invest in the Boulder housing market? Then check out Mashvisor’s investment property calculator and our other real estate investment tools! To start searching for Boulder houses for sale, click here to start your 14-day FREE trial with Mashvisor!