Should you buy a short or long term rental investment property in Denver? We have the answers.
Congratulations to our investor clients who recently found this perfect real estate investment in Englewood Colorado!
This neighborhood boasting views of the Cherry Creek Trail and a prime location providing quick commuting access to E470 and the entire South Metro Corridor. It even has a disc golf course nearby. It’s easy to see why this community was a great choice for one of our investors who was able to purchase a condo and have it rented within 30 days.
Top South Metro Denver agent, Leanne Osgood, knows the market – and this specific neighborhood is one of her favorites. Here are some tips from Leanne on how to research YOUR perfect investment property, both long or short term (VRBO, AirBnB).
1. EXPLORE the Community. This will help to ensure the property and location is where you want to own long-term. Neighborhood research items should include the following:
◘Local market and vacancy rates
◘Cost of Living index
◘Household incomes
◘Schools
◘Amenities like parks and recreation
A great place to start your research is at City-Data
2. KNOW Local Laws. Research the County, town, and HOA rules and regulations. In recent years, cities and towns have become more restrictive in what type of rental housing they allow within their boundaries. If you are planning to short-term rent (30 days or less if you’re in Colorado), make sure to check:
◘Is a rental permit required
◘Do you need permission from the HOA
◘Is there a max percentage of owners to renters within a complex
◘What is the sales tax amount (short term vacation rentals only) and how to setup accounts with local and state agencies to make sure taxes are paid correctly, and on time
3. BUY today and it will build your tomorrow. When you purchase a rental investment, your renters will pay your mortgage. And in time, you’ll build equity, prices will appreciate, and you’ll be taking advantage of tax benefits. And another possible benefit – you’ll have a home for your kids to eventually live in. Smart stuff.
4. To Manage or Not to Manage. Choose the best way to manage your investment. When you decide to rent your property, there are advantages to both self-management and hiring a management company. A typical management company will charge 8-10% of gross rent if long term and 20-25% of monthly rent if short term (VRBO/AirBnB). However, it relieves you of the day-to-day workload. Self-management allows you to keep additional funds in your nest-egg. Make sure to consider:
◘How far away from the property do you live
◘Do you want to deal with tenants and any issues on a daily basis
◘Do you have the time
Self managing or hiring a professional company is a personal preference. In either case, your passive income is still to your advantage.
Real estate investing is not a get rich quick scheme. But with patience and knowledge, you’ll be winning the long term game. Make sure to partner with a local experienced real estate agent to make sure you are making a sound investment.
Leanne began her investment journey at the age of 25 when she purchased her first rental in Duluth, MN. Since then, she has owned/flipped/rented/renovated properties and vacation rentals in multiple states. To learn about investing in today’s Denver housing market and to see if it’s the right time for you, 📱 Call REALTOR®, Leanne today 303.810.5757 or Email.
