Whether you’re currently investing in Denver real estate or thinking about making a purchase, it should be clear to you that this is a growing, competitive market with a lot of potential. One of the reasons that the Denver real estate market is getting so much attention from investors all over the world is its potential for appreciation.
But, what exactly affects property appreciation in Denver? How can you measure and anticipate what you’ll earn over the long term as you rent out an investment? Let’s explore the factors that influence property appreciation, and how you can leverage data and forecasts on where Denver's real estate market may be headed in the future.
Population and Impact on Real Estate Appreciation
Denver's population growth is one of the primary factors that make this such a desirable market. It’s also been affecting property appreciation. Over the last decade, Denver's population has grown at a faster pace than the national average.
With a growing population comes an increased demand for housing. When the demand for housing exceeds the supply, property values tend to appreciate as buyers compete for a limited number of properties.
There’s been a shift in where people want to live over the last three to five years. The forecast is that cities like Denver are likely to become even more attractive, especially as a growing population of people are able to work remotely and choose where they want to live rather than settle for where they need to live.
Denver’s Local Economy and Job Market Contribute to Appreciation in Real Estate
Denver has a thriving economy, with a focus on industries such as healthcare, technology, and finance. This creates job opportunities that leave members of the community feeling more economically secure. When that happens, residents are willing to invest more in their home. They feel like they’re able to spend more on a mortgage or a rental payment.
That’s good news for investors, who can rent out properties and have residents pay down their mortgage as that property increases in value.
Investment in a city’s infrastructure can increase property values. In Denver's case, public investment in infrastructure, such as light rail and airport expansions, has made it more accessible and more attractive to real estate investors.
Location, Location, Location
Location is always a factor. Suburban and rural properties in Denver can appreciate, but urban areas like Downtown Denver, LoDo, and the Highlands have experienced some of the highest real estate appreciation rates in recent times due to the wealth of local amenities and the lifestyle that comes with living in these areas. Homebuyers are often willing to pay a premium to live in these central and convenient locations, and well-qualified residents will not flinch at the rising rental rates.
Appreciation depends on a number of factors, and if you buy the right rental property in Denver, you stand a great chance of earning consistent rental income in the short term and increasing returns in the long term as your asset grows in value.
Cash flow is always a huge concern for investors. Don’t forget that appreciation delivers, too. Especially in the Denver real estate market.
If you’d care to talk about this further, please contact us at PURE Property Management of Colorado.
