Denver Real Estate Market Heating Up, Residential Investors Clean House
Real estate investors have spent years trying to figure out where the bottom of the market is. According to Gregory Beran of Performance Property Management in Denver, Colorado, we are a few steps up from bottom in the Mile High City of Denver, Colorado.
According to Beran, the two ingredients that make residential properties attractive to buyers are low prices and high rents. Beran, a long time property manager and investor in the Denver metroplex, says those conditions exist right now. He says competition is heating up for his rental units and vacancy rates have plummeted.
“We don’t have any single family homes available” the lanky investor told me during an exclusive interview. “They don’t stay for rent longer than a week or so.”
When asked about two bedroom apartments Beran was only able to offer one prospect for a fast move.
“It is the trickle down effect,” Beran said during our discussion in his nicely appointed office on South Broadway Boulevard in Denver. Unlike “trickle down economics” in which wealth trickles down from the super rich to the middle class as promised by the Bush administration, the trickle down effect Beran is talking about is from those transitioning from home owners to small house and apartment renters after losing their homes in foreclosure.
“The banks aren’t letting people stay in their homes any more,” Beran explained. “So people are moving from large houses into anything we have.” The same is true for apartments, as people face a substantial lower standard of living after losing their homes and condos and being forced to accept significantly less.
Even though a person has a foreclosure or bankruptcy on their record Beran may still work with the tenant.
“I like to work with people to see if we can help them. If I am convinced they will pay the rent then we overlook a lot,” he told me.
Beran qualifies the tenant by checking their criminal and civil background. He is looking for serious criminal charges as well as prior evictions. Assuming the person has stable employment, the Denver leasing agent tries to put them into something they can presently afford.
All of this is good news for landlords trying to hang onto their properties and for new investors. Sales prices still remain competitive in Denver. There are scores of fixer uppers on the market. An investor who is able to buy right can lease the property for positive cash flow. One bedroom units rent for $550 to $595 in lower income complexes, which are favored by investors. Two bedroom units go for $650 to $750.
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