The opportunities in the real estate market have never been better for individuals looking for outstanding, risk adjusted returns. The residential rental market has been remarkably resilient during the recent recession and as the economy improves, home values and rental rates are projected to increase. Denver in particular, is a very attractive marketplace for real estate investment.
Denver and the surrounding area is supported by a diversified economic base that includes telecommunications, transportation, biotechnology, energy, and agribusiness; all growing sectors that are bringing new business to the city. Further, with its cultural amenities, outdoor recreation options, and mild climate, Denver is consistently ranked at the top of the list of desirable places to live.
Historically low borrowing rates, a robust rental market, a growing local economy, and favorable demographic trends make it an ideal time to consider making a rental/income property investment.
The returns on investment property that is acquired now and held as a rental are likely to be quite good for the next several years. A net Return on Investment (ROI), using leverage, can be expected to be about 10-15% the first year depending on location & condition. These estimates are free cash flow returns and do not take into account property appreciation or escalation in rent. Based on our assumptions, which are conservative relative to many of the forecasts, returns can be expected to rise over time. Most forecasters believe that real estate will appreciate at the rate of about 7% per year going forward. There are forecasts as high as 9-10% but I would rather err on the side of caution. We are using an appreciation rate of 4% per year. Rents have historically escalated at the rate of 4% per year. For an investment held for 7 years one can expect overall returns in the range of over 30% per year. If this sounds good to you, call Willie at 303-908-2330 or Lizz at 303-907-1984 and let us explain how you can have your money start working harder for you.
Did you know…..
That you can use IRA or 401K funds to invest in real estate? Many people believe that they can only invest these funds in stocks, bonds or mutual funds. This simply isn’t true. You can roll any of these funds into a self-directed IRA that can be set up to invest in one or more investment properties. Call us today and let us explain how.