Yesterday, I spoke with Larry Hotz who has been selling Denver Real Estate on the south side since 1978. He is a broker with The Kentwood Company which is Denver's largest independently owned and operated real estate company. I wanted to know how that city is weathering the downturn in home sales and if it is a good prospect for real estate investment.
Larry says home prices have held about even since the first of the year in the better neighborhoods. But, rents for houses for rent have increased over 10% in the last year. Evidently, Denver is experiencing a net gain in population because the economy is healthy and major companies are transferring employees into the market. Still, sales are down about 8% from the year ago period. So, not everyone who moves there is buying a home. Many are going into rentals.
Now, investors can actually expect positive cash flow with 10-20% down payment on single family homes in good neighborhoods. Most investment homes are rented as soon as a sign is posted in the yard. So, vacancy is not a cash flow issue there.
The bottom line is that Denver might be an attractive market for real estate investment so long as Denver relocation by major companies continues.