Denver's real estate rental market has been experiencing a period of rapid growth and evolution. As the city's population continues to grow, new construction projects are constantly springing up, and trends in urbanization, resident demographics, and rental preferences are shifting. This presents both opportunities and challenges for real estate investors looking to enter the market.
Let’s explore the latest trends in Denver's rental market and identify key insights that every investor should be aware of, whether they’re investing for the first time or growing an entire portfolio.
Shifting Demographics in Denver’s Rental Market
One of the most significant changes in Denver's rental market is the shifting demographics of the residents you’ll be attracting. In particular, there has been a surge of millennial residents who are seeking urban lifestyles and proximity to public transportation. This trend is driving demand for apartments and homes in trendy, walkable neighborhoods such as LoHi, RiNo, and Highlands.
Additionally, there has been a growing demand for pet-friendly rental properties, as more residents want the freedom to own pets without facing restrictive lease terms.
Prepare for older residents as well. Retired individuals are preferring to rent, enjoying the opportunity to remain active and engaged in a city like Denver without worrying about home maintenance.
Rents are Rising in Denver
Inventory is not much of a problem right now, but still, prices are high. The rents in Denver have been consistently rising over the past few years. This trend has been driven by a combination of factors, including:
Buying a home is more expensive than ever.
Inflation.
There’s a strong demand for good rental housing.
Vacancy rates are low.
Construction costs are rising.
However, rent increases have been unevenly distributed across different neighborhoods, with some areas seeing much larger increases than others.
New Construction Properties for Rent
Despite concerns about rent increases and affordability, new construction projects continue to be a major force in Denver's rental market. In particular, developers are focusing on building luxury apartments with high-end amenities aimed at attracting well-qualified residents. This has created a difficult environment for investors looking for affordable properties that can generate stable rental income. However, there are still opportunities to find value in emerging neighborhoods with lower construction costs and less competition from other investors.
Short-Term Rentals
Another trend that we cannot avoid is the trend of short-term rental properties. While the city of Denver has placed restrictions on short-term rentals, many real estate investors are still opting to list their properties on platforms like Airbnb and VRBO to generate extra income. This has created some potential risks for investors, including the possibility of fluctuating rental income and increased competition from short-term rentals in the local area.
Denver's rental market is evolving at a rapid pace, and real estate investors who want to succeed will need to stay informed about the latest trends and insights. Working with a Denver property management company can help you remain flexible and prepared for whatever is coming next.
Let’s talk about how shifting preferences, trends, and values are impacting your specific investment properties in Denver. Please contact us at PURE Property Management of Colorado.
