In spite of strong economy, compressed cap rates and plateauing rents also force investors to search elsewhere.
IRVINE, Calif., March 13, 2017 – HomeUnion, an online real estate investment management firm, has announced that single-family rental (SFR) investors are beginning to leave Denver, as low cap rates, plateauing rents, and rising home prices decrease desirability for property acquisitions.
“From an economic standpoint, Denver is quite strong. Employment growth should outpace national levels, especially among the trade, transportation, and utilities sector,” says Steve Hovland, director of research at HomeUnion.
“However, price growth and compressed cap rates are making this market less attractive for investors. Additionally, we’re going to see higher levels of competition for tenants, as apartment developers bring thousands of new units online this year. Denver is a sellers’ market in 2017.”
Here are some key takeaways on the Denver investment housing market:
- Single-family rental (SFR) vacancy in Denver is expected to decrease by 30 basis points to 6.7 percent
- Rents for Denver SFRs are anticipated to grow to $2,097 per month, up 1.6 percent from 2016
- Prices for investment homes in Denver ended 3Q 2016 at $327,000, with about 51 percent of investors choosing to use leverage
For more information on the state of the U.S. investment housing sector and market conditions in 29 metros nationwide, download the 2017 National Single-Family Rental Research Report.
HomeUnion is an online real estate investment management firm. Based in Irvine, Calif., it provides all the services needed for individuals to invest remotely in single-family rental (SFR) properties. The company uses a combination of research and proprietary analytics to incorporate data on over 110 million homes and 200,000 neighborhoods into their database, and then delivers its solutions to an on-the-ground infrastructure that currently serves 11 locations. HomeUnion’s role spans the lifecycle of the investment transaction: identifying sound investments, handling all aspects of acquisition, maximizing income, protecting asset value, and selling the asset when the time comes.
Communications Manager, HomeUnion