(Originally Published September 9th, 2011)
It had to happen sooner or later. As more and more people are forced out of their homes either through a short sale or foreclosure, rental units have become more and more in demand. The rental market in Northern Colorado (Fort Collins, Windsor, Greeley, Loveland) has been becoming tighter and tighter with little end in sight. Rents are on the rise and as investors flood the market, you can understand why the rental market in Northern Colorado is so hot.
If you’re looking to buy or invest, you’re in a good place. There are plenty of homes available (although I expect available listings to diminish over the next 2-3 years) and affordability is at an all time high in Fort Collins. As an investor, it is your best bet right now to get in on the hot rental market, buy and hold for the long term and realize both consistent cash flow, along with expected long term appreciation. As a buyer, there has been no better time to buy a home: rates are near 4%, prices have dropped, and it’s still easy to find a good deal.
The rental market in Northern Colorado is so hot because of our good friends: Supply and Demand. Vacancy rates are near their lowest points Fort Collins, Greeley, Windsor and Loveland – across the region. We are seeing some of the highest demand in history for rentals; from large apartment/condo/townhome complexes, all the way to investor owned single family homes. Demand with limited supply is why the rental market is so hot.
Distressed Properties: Foreclosures and Short Sales
If you’ve been foreclosed on or gone through a short sale on your last home, you’re unable to purchase a new home from anywhere between 18-36 months. Your only other option is to rent. These folks still need a place to live, and will eat up a lot of the single family homes and larger apartments throughout Northern Colorado.
As the national economic turn-down affected those of us in Northern Colorado, many lost their jobs. As a result, some of those folks were luck enough to be able to sell their house before they couldn’t pay their mortgages and were able to get into a better rental situation until a new job or increased stability was possible.
Bank Restrictions and Regulations
Along with the mortgage meltdown, banks had to more tightly regulate who they lent money to. Gone are the interest only loans and most of the 0% down programs where otherwise non-qualified buyers were able to get a loan. Nowadays, lending restrictions are tighter, the pendulum has swing from loose to very strict, and its much harder to get access to money as it once was.
Indecision, Fear and Lack of Confidence
The remaining folks in rental situations are those who are just not confident enough in either the Northern Colorado real estate market or their own personal situation, so they chose to remain in rentals. Others are afraid to take their remaining savings and put it into a new home, after what happened over the past few years. There is also an abundance of doom and gloom from the national media, even though the Northern Colorado real estate market hasn’t been as affected as most of the nation. Until there is more confidence in the economy and real estate market, we will continue to have a very hot rental market in Northern Colorado.
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