There are so many options when it comes to investing in Lakewood real estate, and the investors we work with often want to know where and what they should buy.
The market is changing, as markets will do. Luckily, in this part of Colorado, it’s always a good time to invest in rental real estate. One of the best ways to earn as much as you can in both the short and long term is to buy a single-family rental home.
We have been effectively working in the local sales and rental market for years, and we think that single-family homes are the best option for investors right now. Whether you’re buying your first property or adding to an existing portfolio, we can tell you that single-family homes are the way to go for a number of reasons.
Let’s take a look at some of the benefits that a single-family home can provide when you’re looking to rent out a property in Lakewood, CO.
Understanding the Single-Family Inventory in Lakewood
Existing single-family homes are already available on the Lakewood market, and new construction is providing additional inventory. For a while, it looked like single-family homes were going to be hard to find for buyers. But, with interest rates rising and the sales market cooling, people are backing off a bit, which leaves more availability to investors who recognize an opportunity.
Investors can find single-family homes in a number of diverse and unique neighborhoods around the area.
Demographic changes also favor single-family homes and reflect the demand of the local market. Right now, single-family rental homes are among the fastest growing segment of the U.S. housing market. Large, corporate investors are buying up what they can, and in some cases, they’re building entire communities of single-family homes with the intention of renting them out.
Renters enjoy moving into single-family homes because they allow for:
Access to safe, established neighborhoods that are family-friendly and usually in good school districts.
People rent these homes because they want to live in a house but they don’t want to maintain a house. They prefer maintaining a flexibly lifestyle where they can easily move if they need to for job changes and financial factors.
When you invest in single-family homes, you’re ensuring that your tenant pool will be strong now, in the current market, and for many years to come.
Attracting Long Term Lakewood Tenants
As we discussed, one of the main benefits of investing in single-family homes is that you can access a large tenant pool.
Not only do more tenants want to rent single-family homes, many of them are well-qualified. By renting out a home such as this, you’re more likely to attract higher quality tenants. People who want to move into a single-family home are likely to be more stable and reliable. They want to settle in for a while and probably won’t move as soon as the lease term ends.
With demographics changing and people shifting from home ownership plans to a preference for renting, a single-family home will give you the opportunity to find a tenant who is likely to pay rent on time, take care of your home, and stay in place for several years.
This type of tenant stability contributes to more rental income and higher ROI. You won’t have to worry as much about vacancy and turnover costs, and you can project what you’ll earn in rent from year to year.
Higher Rental Values and Appreciation with Single-Family Homes
There’s also the matter of earning more. Single-family investment homes help you do that.
For starters, you will typically earn more rent on a single-family home than you will on an apartment, condo, or multi-family unit. People are willing to pay for the benefit of living in their own home. They’ll enjoy some outdoor space, potential garage parking, and extra square footage in a residential neighborhood. That will translate into a higher rental value.
Your long-term earnings will also be higher. Single-family homes have always appreciated in value faster than multifamily units. Your value is increasing even while your tenants continue to pay down your mortgage.
When you’re ready to sell your asset, you’ll sell it for more and turn your equity into higher returns. Property values will continue to climb when you invest in a single-family home, and that means you stand to earn more money on the investment in both the short and long term.
Sharing Maintenance Responsibilities with Lakewood Tenants
Every rental property comes with maintenance costs and expenses, but with a single-family home, you can probably rely on your tenants to help you take care of it.
This won’t necessarily save you money; those maintenance calls will not cost you less in a single-family home. However, your preventative maintenance is likely to be better in a single-family home.
Your tenants are more likely to help out in the care of your property. They typically feel more invested in the home. You can expect them to change the air filters regularly and potentially even help out with lawn care and snow removal.
Ultimately, maintaining your investment property is your responsibility. But, you’re likely to find that your single-family home tenants will be proactive in keeping things in good shape. They’ll want a lawn that looks nice and they may be willing to try to fix that toilet noise on their own before turning in a maintenance request.
There are a lot of options when it comes to investing in and around Lakewood, Colorado. That’s good news for investors like you. If you’d like to consider single-family homes and how these rentals can increase the value of your investment portfolio, we’d love to discuss your investment strategy. We are experts in the Lakewood rental market, and can identify some opportunities that will work well for you.
Please contact us at PURE Property Management, Lakewood property management experts serving residential landlords in West Denver and the surrounding areas, including Littleton, Golden, Wheat Ridge, Arvada, and more.