All Forum Posts by: James Carlson

@Marcus Auerbach

I'm sure other people will have some thoughts. I think it's largely driven by demand going up and inventory going down. But there are a few factors

Inventory/Demand
I show these stats in our first-time homebuyer's class, and I think they get to the heart of a lot of the increases.

In 2006, there were:

• 24,000 homes on market at any given time (like a snapshot of the market)
• 19,500 new homes built
• 19,000 net migration into Denver metro

In 2016, there were:

• 4,500 homes on market at any given time (on average)
• 9,000 new homes built
• 38,000 net migration

I'm not an economist, but I can see that homes for sale dropped by 20,000, new home builds were cut in half, and meanwhile the number of people moving in doubled. Demand goes up, supply goes down, prices increase.

Cost of building
Add to that the cost of materials and cost of labor (due to a lack of construction workers) increased the cost of building. (Builders will say it was the threat of lawsuits that made them stop building. I don't buy that.)

Tech influx
I've seen some stats saying that salaries aren't keeping up so at some point there has to be some downward pressure on prices, but I know Denver is becoming a big tech hub, bringing with it high-paying jobs. (We're working with two such people right now, one works at Hello Fresh, the other works at Slack.) You have both people moving here for in-office, high-paying jobs but also people moving here who can work remotely so they're getting west-coast money and living in Denver priced homes, which are still "affordable" compared to where they came from. So I see those people sustaining prices for awhile.

What to do?
This all adds up to fewer people being able to afford. We see it with some of our long-time friends here in Denver. It's also why house hacking is working so well here. So many people are looking for a room to rent. Or we have people barely able to afford who want that house with a basement apartment to rent out and offset their mortgage.

I think it's great to live in such a cool city where so many people want to be. But I know it has some serious downsides for many people as well. 

I do not believe in the "no dumb questions" thing. Like, "Can I use nail polish to paint my teeth white?" Dumb question. Or "How do you spell 'GFCI' outlet?" Dumb question. Your question? Smart question.

Basically, this is a Kleenex vs. tissue thing. Or a Q-Tip vs. cotton swab thing. And to make a long-story short, there's no difference in their training. In Colorado at least, they've all taken 168 hours of training and passed a state and national exam. 

Realtor -- capital 'R' -- is a name copyrighted by the National Association of Realtors (NAR) for all its members. It's members are -- getting tricky here -- real estate agents who have decided to pay to be a member and are now also Realtors. Another way to think of it is that all Realtors are real estate agents. Not all real estate agents are Realtors.

I've worked with agents in Denver and Colorado Springs who are members of NAR and those who aren't, and there are good ones and bad ones in both camps. I personally don't see the value. I know some brokerages require it, and hell some whole areas require you to be a Realtor to get access to the MLS. (Talk about a racket.)

We believe in our own marketing and competence and just don't see the value.

@Andrew Hall

What Denver neighborhood are you in? There just aren't a ton of areas that allow for Accessory Dwelling Units (ADUs). Some areas of Berkeley and Sunnyside; some areas in Cole, Whittier, Five Points; some of Lincoln Park/Baker, I think; and some areas in Platt Park. 

Either way, like others have said, most cities are fine with outlets and water and sewage. Where you might run into issues is getting permits closed out if you have a gas line out there (for an oven) or a 220v (that appears to be for an oven). Those are the two things that most cities consider the triggering point for a separate dwelling unit. 

Now, could you not do a gas line and/or not do a 220v right in an opening between cabinets that appears to be for an oven? Could you instead find a flat top range that only requires a 110v? Lots of people do it. But two big issues with that. 

A) That's just an end-run around the law and again, if the city finds out, they'll shut you down. I know I like my investments to be on sound footing so that they're long-term investments; and
B) Like Anson said, you could be in some legal hot water if there's a safety issue out there and you haven't been operating within the rules.

Hate to be a buzzkill on this. Do you happen to have a basement with potential for a lock-off or separate entrance? You could build out a quick Airbnb down there if offsetting your mortgage is the goal. I wish you luck.

@Sam Dalton

The pros and cons are pretty straight forward. The pros are that you get more money for a furnished rental per month than a traditional unfurnished one. (Add in furnished medium-term rental, and you get even a bit more). The cons are it's more up front work and -- if you're doing medium-term -- possibly more work to get tenants.

About whether it would work for you or not ... If it's a bigger home more in the 'burbs, it doesn't seem like an ideal setup for a furnished rental. But if it's smaller and closer to the city or closer to a hospital, it might be a good candidate. We have a 1br condo in the Capitol Hill neighborhood of Denver. It's not necessarily right by a hospital (though there are two within a mile or two), but it is in the heart of things. So it does well as a furnished rental. In fact, I'd say the majority of tenants are not actually traveling nurses. They're in town for an internship or business or want a place for a few months to learn the city before buying.

We also have a home in Colorado Springs we recently bought. It's a mile east of downtown and really close to a college and two blocks from a hospital. We're living there now (and may again in the future), but we put the top and bottom (each 2/1 units) on Airbnb for 30+ day rentals just to test the market, and it has been getting some hits. 

Anyway, I wish you luck with it. Cheers!

@Joe Splitrock

I agree with you and do kind of wonder why the wild shift for Denver. The parking is the biggest issue in my book, and when I'm looking at possible house hacking homes with clients, I give a lot of value to at least three off-street parking spots. It's good for the neighborhood and good for you (avoids the headache of neighbor complaints.)

I could see something like allowing as many adults as there are bedrooms plus 1 or 2. (So a 4br home would be allowed to have six people, something like that.) 

@Todd Fuller

Not what you're asking about, but I'd just add that you want to make sure you know the Airbnb/short-term rental laws in your city. When I started calling the city of Denver and the city of Colorado Springs about their STR laws back in 2016, no one in the planning or zoning department even knew what the hell I was talking about. Things have changed a bit, so you can call the planner of the day at your city's planning office and they should know. Sounds like you might already know this but I thought I'd put in a plug for due diligence.

I wish you the best with the property. 

@Archer Newlun

Yeah, the Colorado Springs city council voted to approve the measure. It's essentially what I laid out in my post about halfway down in my "update." I think for those looking to buy a pure Airbnb/STR investment, the easy days are over. There are still a few homes for sale that come up that are both A) in R2 zoning and B) outside of a 500-foot bubble from any other non-owner occupied short-term rental. 

I send a list of possible properties to the city every Friday to check whether they're outside of the bubble or not. 

If you're looking to invest in Colorado Springs, you can be patient (very patient) for a home that meets the above criteria or you can get more creative and look for a house hacking opportunity or straight-up rent-by-the-room model (if you don't want to live there).

I wish you luck!

@James De Stefano

Yes, add that to proximity to the mountains, 300 days off sun, great beer, restaurants, bars, arts, parks ... I could go on about why you'd want to live in Denver.

Good news for those house-hacking types within the city limits of Denver. The city is considering increasing the number of unrelated adults who are allowed to live together. With Denver facing an affordable housing crisis, this change falls under the category of "Duh, about time." 

(And props to @John Mayer & @Savanna Mayer for following this issue as they embark on their first house hack.)

A few highlights:

What's the current limit? What's the proposed new limit?
Currently, Denver allows 2 unrelated adults to live together, one of the worst. This is nuts. The proposal would increase that to 8, one of the most liberal in the state.

What do other cities allow?
Denver's the stingiest. (Along with Englewood, who also only allows two unrelated people to live together.) 

Allow 3 unrelated people
Wheat Ridge, Littleton and Commerce City

Allow 4
Aurora, Golden, Northglenn, Thornton, Westminister

Allow 5
Castle Rock, Colorado Springs, Arvada, Lakewood & Parker

What's this mean for me?
You know, the city of Denver had bigger fish to fry than to go scouting potential violations of the unrelated occupancy law. So in practice, it might not mean a lot. But if you're someone looking to house hack or just do a rent-by-the-room model in Denver, this could give you peace of mind that you're not going to get shut down. 

Timeline?
Short answer: Possibly June of this year for full passage.

Long answer: The proposal is going to face some open house/public comment sessions. (Check this link, halfway down for a list of the sessions where you can make your voice heard.)

It then has to go to the planning board and then the city council

More info please?
You can find more info the group studying the issue here. (Check out the "'Questions on Household Definition" about a quarter of the way down.) Or read the presentation here.

@Account Closed

I wish you luck at MacDill. Tampa ain't a bad place at all to be this time of year. And good luck with your STR in the Springs. Cheers.