The market trends prevalent in the real estate market in Colorado should be viewed in the backdrop of rising interest rates and an ever-increasing cost of living. One of the investment hot spots appears to be the Front Range with real estate prices increasing at full throttle in Denver. The general expectation now is that prices will steadily escalate to the point of discouraging buyer demand. The rental market on the other hand is booming.
People are racing to moving to Colorado, especially Denver. This is for several reasons. Colorado currently boasts one of the highest GDP growth rates. Major industries that have contributed to this growth are mining, manufacturing, wholesale trade and construction. As a result, Colorado has now become an employment hotspot. Given that people are now racing to get there, it is no surprise that the real estate market in Colorado is thriving.
Real estate investors should calculate the cash flow numbers on the investment property before diving into Colorado market. Here are some specific area-wise strategies:
Investing in Boulder in properties for single families that have been 'split into units' for higher rent income. This is because home prices are quite high, along with the price to rent ratio. A large staff and student population in Boulder would be attracted.
Single family homes are doing well, and it would also be wise to consider investing in retail restaurants. However, in order to capitalize on these, investors should invest quickly because prices are rapidly increasing.
In Denver, apartment complexes have the best investment potential because Denver is attracting a very high number of renters. As of now, construction loans will be considered low risk, but this will change soon as the prices in Denver and Boulder are rising at a very fast pace.