Denver #1 in Rent prices and it's not slowing down. Invest now!
Residential Real Estate Broker · Denver, CO · Member since 2015 · 3 posts · 0 votes
I am a big fan of Denver as a whole for investing, living, etc. There is one neighborhood that I think has the potential to be a goldmine though.
Elyria/Swansea is just north of downtown and other hot areas.
Pros: Closeness to Downtown - Very low prices - The CHANGES (see links below)
Cons: overhead highway (being relocated) - Still run down in areas (but see the changes that are in store)
Denver is taking this run down area and sinking tons of money into it to turn it into the entryway to downtown from the airport. They are.
Moving the elevated highway underground and building a beautiful city park over it. Based on this park in Dallas http://www.klydewarrenpark.org
Turning industrial into residential and commercial. Look what this has done in Denver's RINO neighborhood just south of here, Brooklyn NY, etc.
And a lot more. Check out Denver's plan, so you don't have to take my word for it. www.denverleadership.org/wp-content/uploads/2015/10/Kelly-Leids-slides.pdf
I recently bought a single family 6bed/3bath house 3000+ SF built in 1999 with a brand new roof and flooring for $275k. You can't buy a condo for that anymore.
What do you think?
@Jerry Vohrer here are my thoughts. I'm not a big fan of the area. It will probably do alright but I think it's hard for the small investor to make a play in the area. The neighborhood is full of small homes on small lots that are zoned single family or larger industrial tracts. There are some areas zoned duplexes. The rest is zoned industrial. What is going to happen with that? Who knows. Will Denver rezone/downzone it? The stated objective is to convert the industrial to commercial in this area. What happens with that is anyone's guess at this point unless you are on the inner circle of development politics. The large tracts of industrial land will likely go to apartment buildings if the current development trends hold. We all know that sort of thing is bit fickle. The Gates Rubber campus was slated for a huge condo complex about 10 years ago. It's just now getting some traction (less than 50% complete) with apartment buildings being constructed. I think the original planners figured the area would have been built out about 5 years ago.
My biggest concern is time frame. Right now construction is scheduled to begin late 2017. I could find no construction time tables. Following TREX as an example, it was scheduled for 7 years but finished 22 months ahead of schedule. This project will likely take 4-6 years to complete. That puts the window of completion at 6-8 years from now. Given that, I think you are getting in a bit early. The biggest bang for the buck comes when you buy the year or two before the project is complete from a SFR perspective. Homes along the Santa Fe light rail jumped 25% in the first year after that line opened.
The other play is to purchase large lots that are zoned for high density and wait until it's complete. That is pretty speculative. Again, the best is get in just before the project is done and the general population starts buying. The saying in Commercial development is that "commercial follows roof tops". Meaning, commercial developers only step in after there is demand due to residential development. You could argue that there is some demand for commercial from the downtown core but it's still a bit of a hike to that area.
It think you will do ok but I think there are areas that offer a quicker return and by rinsing and repeating you will be miles ahead rather than waiting for the project to be completed around you.
@Jerry Vohrer here are my thoughts. I'm not a big fan of the area. It will probably do alright but I think it's hard for the small investor to make a play in the area. The neighborhood is full of small homes on small lots that are zoned single family or larger industrial tracts. There are some areas zoned duplexes. The rest is zoned industrial. What is going to happen with that? Who knows. Will Denver rezone/downzone it? The stated objective is to convert the industrial to commercial in this area. What happens with that is anyone's guess at this point unless you are on the inner circle of development politics. The large tracts of industrial land will likely go to apartment buildings if the current development trends hold. We all know that sort of thing is bit fickle. The Gates Rubber campus was slated for a huge condo complex about 10 years ago. It's just now getting some traction (less than 50% complete) with apartment buildings being constructed. I think the original planners figured the area would have been built out about 5 years ago.
My biggest concern is time frame. Right now construction is scheduled to begin late 2017. I could find no construction time tables. Following TREX as an example, it was scheduled for 7 years but finished 22 months ahead of schedule. This project will likely take 4-6 years to complete. That puts the window of completion at 6-8 years from now. Given that, I think you are getting in a bit early. The biggest bang for the buck comes when you buy the year or two before the project is complete from a SFR perspective. Homes along the Santa Fe light rail jumped 25% in the first year after that line opened.
The other play is to purchase large lots that are zoned for high density and wait until it's complete. That is pretty speculative. Again, the best is get in just before the project is done and the general population starts buying. The saying in Commercial development is that "commercial follows roof tops". Meaning, commercial developers only step in after there is demand due to residential development. You could argue that there is some demand for commercial from the downtown core but it's still a bit of a hike to that area.
It think you will do ok but I think there are areas that offer a quicker return and by rinsing and repeating you will be miles ahead rather than waiting for the project to be completed around you.
Well said @Bill S.
The subject is a tad misleading - rents are up and continue to grow. I am seeing rents soften a little just purely from an affordability standpoint with exception to the new luxury apartments which are still coming online hot and heavy.
Never been much of a fan of this area because there are lower risk, higher return plays in town. That is not to say a pioneer to the area cant do well in the long term. Although folks who truly pioneered in 2008 when the houses in this area where near free, will do the best. It will be very interesting to see how this area is shaped and if the proposed plans get done in a timely matter to the extent planned.
Has this I-70 project even been given the green light? I echo what @Bill S. says especially about time frame. It could be 15 years before this project is complete.
I can do a lot more with my money now than wait 15 years for an investment to mature.
It was approved by Denver city council a couple months ago. They were interviewing engineers a couple weeks ago and I think bonds aren't set to be issued until 2017.
The project has been green lighted. Plans are public. Houses in the construction zone have been bought out already. CU is building a pretty huge Veterinary campus and Hospital on the Western Stock show grounds. I believe that is supposed to bring 1200 people to the area between students and staff. The Source on Brighton is also building a hotel next door. Theres a lot going on. People are getting priced out of RINO and Whittier and are moving North to Cole, Globeville, etc.
Holds are not for everyone. I don't think this area is ideal for quick fix and flips or immediate scrape and rebuilds. I agree with you there. If you have the money and experience, and have been successful, fix and flips are a great business, even in this market. If you have the experience. But they are not for everyone.
The rents currently compared to housing prices mixed with the potential due to location and the amount of projects popping up here make it great for someone building a rental portfolio in Denver.
The rental data was likely from a few months back, but it was just announced that Denver is #1 per capita in the country. Including NY and California. Everything softens somewhat this time of year, both rental and sales, but I'm right here in the city and it's barely slowing, if at all. And the rate people are moving here isn't slowing. It's a good time to be a landlord.
CU is building a pretty huge Veterinary campus and Hospital on the Western Stock show grounds.
It is actually CSU, not the lame buffalos. Go Rams!
From what I could find, looks like they have narrowed down the private contractors to 4 groups and will select one of those sometime next year to move forward with the I-70 plan.
I currently live in Swansea in my first owner-occupied soon to be rental property. I bought in this area a couple years ago mainly because it is close to my work and I could get in cheaply. I'm now looking for my next owner-occupied, but a little farther south (Cole/Clayton). Having lived here for 2 years now, I can tell you the neighborhood has a lot of changing to do still. The potential, as you mentioned, is the location and new I-70 developments. I've been following those closely and attending the regular meetings helping to plan the park, etc. But the downsides of actually living here are many:
-It stinks all the time from the local puppy show factory and some other factory that nearby that makes the air smell like ammonia most nights. It doesn't exactly make you want to be outside even on nice summer nights.
-There is a lot of gang violence. There was drive by shooting in front of my house earlier this year. I was in the kitchen as they fired gunshots in front of my home after work one day. The police closed off my street so they could gather shell casings. And the park down the street has needles in it and is completely tagged with graffiti every time I walk my dog. I would never raise children here.
-I didn't find out until after I'd purchased the home that this neighborhood is one of the worst Superfund sites in the US for soil contamination (lead and arsenic mostly from the old smelters). The EPA decided it didn't have enough money to remediate most yards in the neighborhood, so we can't garden, do any yard work without a mask, or have your kids play outside. Most of the local dogs die of weird cancers at young ages (verbal from my neighbors). If you dig into the background on this issue, it gets uglier and uglier. PM me if you want more info.
-The area continues to be ignored in general. It's a food desert (closest grocery stores are in Commerce City and Stapleton), there is no gym access within 20 min. besides the small rec center, there is virtually nothing you can walk to for food, and the closest veterinarian is in Park Hill.
I could go on and on, but those are the main detractors. Would I buy here again? The answer is- I don't know. I'm still looking for deals in the area, but the kind of tenant who will live in these areas may not be the kind of tenant I want.
Thanks for the info.
Is that the Superfund site on 51st and Washington in Globeville? That is the closest site I have found.