With inflation on the rise, your dollars don't stretch quite as far as they did even a year ago. So, it's not a surprise that more than one person is looking for passive income and side hustle options. In recent years, real estate investing has proven a popular choice for both of those.
Of course, becoming a real estate investor in Denver shares a lot with becoming a real estate investor elsewhere. There can be some surprises, though. Keep reading for our quick guide to real estate investing in Denver for beginners.
Types of Investments
There are a few ways you can invest in real estate in Denver or real estate in Colorado if you want to expand your horizons. You can buy real estate with intention of turning it into a rental property. This can work with multiple types of real estate, including:
- Single-family homes
- Multi-family units
- Commercial properties
You might adopt a buy-and-hold strategy where you purchase a property and wait for the value to appreciate over time before selling. There is also the fix-and-flip approach where you find undervalued properties, do some repairs, and then sell at a profit.
They're rare, but you can also look for city- or state-specific REITs.
Understand the Financial Realities
You need a clear understanding of the financial realities of buying real estate at present. The median price for a single-family home in Denver is around $650,000, with townhouses and condos averaging around $460,000.
Unless you do exceedingly well for yourself, buying a property will likely mean taking on a mortgage payment. If you plan on renting the property, you'll want to charge enough to defray most or all of that monthly payment.
Develop a Plan
You need a plan before you start investing. Your plan should include things like how you'll finance your purchases, how long you'll hang on to properties, and the types of properties you plan on buying.
If you want an income-generating property, how will you monetize it? Will you focus on full-time leasing?
Denver has a lot of tourism. Will short-term rentals make you more?
Planning these things in advance lets you make a better choice with your first property.
Consider the Management Issues
You must also consider how you'll manage the property. If you buy multiple rental properties, the landlord duties can prove overwhelming.
You may find that working with a property management company will make your life as a real estate investor easier.
Real Estate Investing and You
Real estate investing in Denver is a legitimate option for expanding your investment portfolio, but you must approach it the smart way. Consider what kind of investing you'll do. Will you focus on fixing and flipping, rental properties, or look for truly passive investment options like a Denver-specific REIT?
You should make a plan for your real estate investments that focus on the financials and your long-term goals. Don't forget about planning for the management of the property.
Laureate LTD. offers property management services in the Denver area. For more information about our services, contact Laureate LTD. today.