Three years ago when I purchased my current primary residence the interest rate was 6.5%. Now, primary residence rates are around 4.5%. Non-owner occupied (investment properties) rates currently are around 5-5.5%, almost a full percentage point lower than when I bought my primary house 3 yrs ago.
The historically low rates aren’t the only reason why you should be interested in buying Denver rental properties right now, there are several other factors to consider as well.
First, lets discuss what is currently going on in the Denver real estate market overall. With the federal tax credit expiring at the end of April, showings on metro properties during the months of May & June drastically decreased. With showings down, total sales have gone down along with it. This caused a shift in the market, going from a Seller’s market in March & April, to a Buyer’s market in May and the months that followed. This Buyer’s market is a perfect opportunity for investors to purchase real estate while the market favors them.
Another key factor to evaluate when purchasing rental properties is what the current vacancy rates are. Vacancy rates are a measure of the number of units vacant or empty, not producing rental income. In 2004, the vacancy rate in Denver Metro was 13.1%. In 2005, it was 9.5%. In 2009, it was 5.2%. Now, the Denver Metro vacancy rate is 3.8%!! These figures are based off 1-4 unit properties.
With historically low interest rates matched with historically low vacancy rates, it is a great time to be a landlord. Units are full and landlords have the upper hand with tenants. Rents are also increasing, resulting in maximum cash flow to the investor!!
It is relatively easy to qualify for a loan on rental properties currently. Basic requirements: 20% down, a job, 680 or higher FICO score, no major hits on the credit report. If you need a referral for a great mortgage broker to speak with, just ask!
There are several great Denver rental properties available right now, we just need to talk about what your short and long term goals are and get out to see a few that fits your criteria. If you’d like to search yourself to get an idea what is available, feel free to use my Denver Investment Properties free MLS site to search yourself:
Your Castle Real Estate