Denver Investors - I saw a graph posted yesterday on LinkedIn from a local Denver Realtor that shows rents starting to decline and I'm curious if you are seeing that with your own properties. Also curious if that is the case, what would cause the decline. Is supply starting to open up as people are moving out of the city?
@Stuart Grazier I've seen similar stats and headlines (from Denverite, Denver Post, Westword). Personally, my tenants are still in the middle of their lease and because they have professional incomes, I don't expect to need to decrease their rent. At the same time, I understand that rents would decrease during the pandemic due to the lost wages of the prospective tenant pool who is likely skewed towards retail, hospitality and other industries affected disproportionately by the COVID economy. Interestingly, the housing market is a study in contrasts: we are seeing demand increasing, both due to historically low interest rates and also the fact that many professionals (including those who can work from home) likely maintained their job and may have even received boosts in sales margins.
Here's an interesting story in the Denver Post today about the long-term positive outlook for the Denver rental market. And, if nothing else, I think it speaks to the importance of the tenant selection process!
I just raised rent, but that's me.
@Stuart Grazier - I work with a decent amount of SFR, Condo and Townhome investors. From working and talking with Investors it sounds like the rental market for SFR and Townhomes is still strong, but with Condos we have seen softening in the rental market.
One of my friends is a portfolio manager for a large property management group in Denver. They manage anywhere from 4 Unit to 30 Unit +. I just called him he says their rental rates for new construction are down around 15% and for older buildings they are down 10%. Part of this is that their average vacancy has gone up from mid 20s (last year) to around 45 days this year.
Most of their buildings are in the Downtown / City area.
@Spencer Rafii Thanks for that info; very interesting! I'm wondering if a lot of that data is coming from apartments and multifamily, as more people are wanting to have more space and move into single family rentals (possibly due to COVID?). Any opinions or data to back this theory out there?
@Rick Shafer I saw that! Seems like there is a lot of conflicting info out there.
@Stuart Grazier - Thank you for starting this, and thank you everyone for the replies! Good information here, especially for those looking to buy in Denver right now.
We had a SFH (over by Regis) that rotated tenants in June and sat on the market for 2 months with the 3.7% rent increase we were asking. We ended up lowering the rent gradually till it was back to what it had been the last 12 months. Started to get some interest at that price, but decided to sell and reinvest somewhere else (we were still in the 2 out of the last 5 capital gains exclusion).
Our other places don't rotate till April, so I don't have any more current data to share.
I would suggest checking out the Denver Real Estate Investing podcast by @Chris Lopez . He does quarterly check-ins with 3 different property mangers and I find those data points super useful. The most recent one is from November 20th, so it's not that out of date at this point.