Colorado Markets Long-Term

7 Replies

Hi everyone!

I am from Atlanta, Georgia, but currently live in Tokyo, Japan. I and my wife will be moving to the US toward the end of the year. We will be looking for somewhere to settle and invest in RE long term. We are therefore looking at both overall quality of life (raising a family, etc.) and REI potential.

I understand the Colorado market is hot right now and keeps climbing. We likely would not be able to get in as well until possibly the spring of 2016. I don't want to invest in overvalued markets. At the same time my intentions are long term.

I am curious what all of you think about the long-term forecast of markets in Colorado, particularly in and near the hub of Denver. I know many people have similar interests to mine and that the state and Denver are experiencing a lot of influx. I don't want to be caught in an overheated or frothy market. But I still wonder if colorado is a safe bet long term (10, 20, 30 years from now). I realize I can always live where I want to live and invest where it is cheaper to invest, but I would really like to focus my efforts near where I live. I'm not as much interested in cashflow as I am in overall wealth creation.

What do you all think? Will I face too much competition and risk overvaluation if I start investing in Colorado, near Denver, in the spring of 2016?

Thank you!

I am also interested to hearing what the trends are in the Denver market or even Colorado as a whole, particularly with regard to government policies and projects, as well as forecasted population and economic changes. 

Denver is crazy but there are still values to be found. To speculate if there will be deals a year from now - of course there will - how hard are you willing to work to find one? What is the alternative in our market? To pay $2,000 a month in rent? If you are in it for the long run 10 plus years then it really doesn't matter what the market is doing today. Do you stop investing in a 401k because the stock market is near the highest it has ever been?

The point being  - ask any long term landlord or investor how they built their wealth in real estate - you will find - taking action, buying real estate and holding on to it for a long time. It is not likely to find that investors waited until the market was just right for investing.

People thought I was crazy when I was buying rental properties in 2009-2011 when the market was at the bottom. Now people say that this market is too high to buy property and everyone is over paying - so when exactly is the time to buy?

Don't wait to buy real estate, buy real estate and wait.
- T. Harv Eker

 

Originally posted by @Travis Sperr :

Denver is crazy but there are still values to be found. To speculate if there will be deals a year from now - of course there will - how hard are you willing to work to find one? What is the alternative in our market? To pay $2,000 a month in rent? If you are in it for the long run 10 plus years then it really doesn't matter what the market is doing today. Do you stop investing in a 401k because the stock market is near the highest it has ever been?

The point being  - ask any long term landlord or investor how they built their wealth in real estate - you will find - taking action, buying real estate and holding on to it for a long time. It is not likely to find that investors waited until the market was just right for investing.

People thought I was crazy when I was buying rental properties in 2009-2011 when the market was at the bottom. Now people say that this market is too high to buy property and everyone is over paying - so when exactly is the time to buy?

Don't wait to buy real estate, buy real estate and wait.
- T. Harv Eker

 

 Thank you Travis.  That's great advice.  I will be ready to work hard to find deals.  

Originally posted by @Bill S. :

@Nick Brubaker this is a post I wrote a few months ago about this very issue. click here to read

 Thank you for directing me to the link, Bill!  I'm impressed by your encyclopedic knowledge of the Denver area.  I wonder when we can expect vacancy rates in Denver to start "creeping up" as you say.  Do you plan to continue buy-and-holding in Denver long-term?

@Nick Brubaker I am long term buy and hold. Every day and all day. I only do the other to support my buy and hold investing. Vacancy rates are already creeping up. If you are in the luxury market (A class downtown renting above $2.50/sqft) then vacancy rates are 10+%. I don't see that translating to the working class for the next couple of years. I see some price pressure from the fact that wages are not growing. If wages start to grow then the vacancy rate could stay low for multiple years. It's really hard to build and rent for less than $2/sqft. As long as your rents are below that price point I don't see vacancy rates going up anytime soon.

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