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Low Apartment Vacancy Rates in Colorado—Good News for Investors
(via C. Pak on Flickr)
The Colorado Department of Local Affairs reports the following data regarding single-family rentals statewide:
The demand for rental housing continued to grow across Colorado as apartment vacancy rates fell and rents rose during the first quarter of this year. According to a report released today by the Colorado Division of Housing, from the first quarter of 2010 to the first quarter of this year, vacancy rates fell in all five metropolitan areas of the state measured by the survey, including Fort Collins-Loveland, Greeley, Grand Junction, Colorado Springs and Pueblo.
The combined statewide vacancy rate, which includes vacancies from all survey areas and metro Denver, fell 16.6 percent year-over-year, from 6.6 percent to 5.5 percent.
And for Denver, in particular:
Vacancies in for-rent condos, single-family homes, and other small properties across metro Denver fell from the first quarter of 2010 to a new low of 1.4 percent during 2011’s first quarter. According to a report released Tuesday by the Colorado Division of Housing, the vacancy rate was 3.1 percent during the first quarter of 2010, and was 2.0 percent during the fourth quarter of 2010.
The average number of days on the market for single-family rentals and similar properties fell from 45.1 days during the first quarter of 2010 to 29.7 days during the first quarter of 2011. The number of days on the market also fell from 2010’s fourth-quarter average of 38.2 days.
This is all good news, of course, for landlords, but is it bad news for renters? Maybe. But for now, at least, the Colorado Division of Housing reports that despite low vacancy, rental rates have remained largely static at an average of $1,039. (source)
Should You Buy or Rent: An Online Calculator
A lot goes into the decision of whether to buy your home or rent it. But the main factor for most people is cost.
The New York Times has a nifty calculator that analyzes whether you should by or rent. Enter a little bit of info about the home you’re interested in and then it will calculate how long you’d need to rent it before it becomes more worthwhile to have bought it.
Obviously, this can’t make the decision for you, but it might save you a bit of time and mental effort as you look at your budget and make this important decision.
In a Recession, Rental Properties Are Still a Smart Investment
It’s certainly not news to point out that the U.S. has been in a housing recession for almost 5 years. But the stats remain surprising.
House values are 33% lower today than at the peak of the bubble in the middle of the last decade. And though it might seem that this could mean people are buying now since houses are only getting more affordable, new home sales are down 80% since 2005.
(via Ross Corriette)
Certainly, this demise is coming to an end, right? Unfortunately, no. Not very quickly, at least. In the first quarter of this year, home values declined faster than they have since 2008 and fewer new homes were sold than in any other quarter…ever.
It goes without saying that the housing market is doling out lemons, so the question is, what can we do to make lemonade?
The answer is invest in rental properties.
Hundreds of thousands of people are deciding to rent rather than buy. 15 years ago, 89% of Americans preferred owning a home to renting one. Now that is down to 63%, and it will keep dropping as long as the housing market struggles.
It doesn’t feel like there’s anything good about this recession if your home has lost half its value or if you’re being foreclosed on, but if there is a bright side to our dismal real estate market right now, it’s that people still need places to live, whether they can afford a home or not. And so they rent. And the owners of these rental properties—whether the properties have lost value or not—continue to succeed even in the recession. And, in a way, because of the recession.
(via turkeychik)
So, in this trying economy, real estate investment isn’t a bad move if done right. It simply requires a different focus than investors had 5 years ago. Make declining real estate values work for you and focus on rental property.
Sources: Economic Collapse, Zillow