Real estate investors are hunting for the best places to invest and buy in properties in 2019. Colorado is one of these places. Denver, CO recently made it in the PwC’s Emerging Trends in Real Estate Report as one of the top 10 housing markets to follow in 2019! This is a positive indicator of booming real estate in the state of Colorado.
Studies of relevant trends affecting the Colorado housing market reveals that Colorado truly has the potential to provide profitable investment opportunities. Property investors are considering Colorado rental property a good investment in 2019. Let’s look at the reasons which make Colorado a good bet.
Colorado housing market is the seventh fastest-growing in the country. It’s been underrated for a long time, but there has been a massive spike in newcomers in recent years. The Centennial accommodated nearly 80,000 new people last year, which is a population growth of 1.4%. This outranks the national average of 0.6% as per the Census Bureau.
Moreover, the last few years have been fascinating in terms of economic growth for Colorado. Colorado’ economy grew 4.5% year-over-year in Q1 2018 as per the Bureau of Economic Analysis (BEA). Also, the state added about 72,200 jobs last year (a year-over-year increase of 2.7%). As of June 2018, the unemployment rate of Colorado is 2.7%, which is significantly lower than the national average of 4%!
These factors supported Colorado rank in the top 10 states in America, where one can also land their dream job. With a strong economy and a booming population, it’s anticipated that the Colorado housing market 2019 will remain a practical option for real estate investors.
Colorado has fewer new homes for sale across the state. This has induced a price rise with a positive trending. The Colorado housing market has also been strongly influenced by the heightened cost of living as well as the increasing mortgage interest rates across the US.
For property values, the median is $374,100, as per Zillow’s data. This is a 6.6% jump over the past year, and Zillow suggests they will rise by 4.5% in 2019. For real estate investors, these numbers mean Colorado is experiencing substantial real estate appreciation.
As a result of the soaring property prices, home sales in the state have fallen while rental vacancy rates remain low. This is because, despite the strong economy, many residents still fight to make a living in Colorado because of growing housing costs in many of its cities. As a result, home sales sank in the Colorado housing market last year according to a monthly update by the Colorado Association of Realtors.
Since affordability is a hurdle for residents of the Colorado housing market, many are preferring to rent a house over buying one. In turn, this means that the market for rental properties is expanding, which is good news for Colorado real estate investors. As an owner of rental property investment in the state, you’ll have low rental vacancy rates. The rental income is high enough to produce cash flow and a generous return on investment.
Another benefit of keeping rental properties in the Colorado real estate market is that the state is considered as one of the top 5 landlord-friendly states in the country. Colorado is one of the few states where landlords can access the rental property without a 24-hour notice for a reasonable cause.
Also, it’s much quicker and simpler to evict your tenants who don’t pay their rent as law enforcement takes the side of rental property owners. The demand for compliance notice is restricted to 72 hours – during which tenants may pay off their arrears – and evictions happen within 48 hours after the order for compliance expires.
Let’s also get a better understanding of the 1031 Exchange.
If you opt for a 1031 Exchange in Colorado, you should be aware of the basics. IRC Section 1031 enables an accurately structured exchange allowing any investor to trade property and reinvest the profits in a brand-new property and to put off all capital gain taxes. IRC Section 1031 (a)(1) states:
“No gain or loss shall be recognized on the exchange of real property held for productive use in a trade or business or for investment if such real property is exchanged solely for real property of like-kind which is to be held either for productive use in a trade or business or for investment.”
1031 Exchange enables your money to churn the maximum profit for you. However, the process of 1031 exchange in Colorado is extremely complex in nature, and it would be wise to seek guidance from expert professionals. We have extensive experience in handling highly profitable exchanges for our diverse client base.
For consultation and assistance regarding 1031 Exchange in Colorado call – 888-993-0590 or email us at info@1031xchange.com
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