A lot of investors think that investing in rental properties only works in low-end neighborhoods with beat-up houses and scary tenants. Nothing could be further from the truth! Your Castle has done a great deal of research lately and found that buying and holding properties in quality locations like The Spire can yield tremendous returns down the road. Using very realistic numbers, a two bedroom condo in The Spire has a CAP Rate of about 6.1%. An investor in a combined marginal tax bracket of 40% can yield an average annual return of 16%. Try making that in your savings account! As long as interest rates stay low (which cannot last forever), high quality buildings will generate enough rent to cover most or all of their direct costs. If your interested in purchasing your first investment property, or even your second or third!, give me a call so we can talk about your options in this exciting market.
How do we know where to invest? Glad you asked.
Your Castle Real Estate compiles data from the MLS (Multiple Listing Service) then runs it through proprietary software and the result is our price change maps. These maps (shown below) compare the most recent twelve months versus the twelve months just before that to show you where property values are increasing as well as how fast they are selling. With this data you can see areas of appreciation to get the best value in your investment home search.
Here is how to read the price change map:
The first line has the area name, followed by DOM (Days on Market) to get a property under contract.
The second line has the price change percentage and the average price.
The third line has the number of homes sold (as reported by the MLS), the number of active listings, and the MOI (months of inventory). Generally, six MOI is a balanced market. Less than five means the seller has an edge. Over seven MOI suggests the buyers have an advantage.
Light rail lines that are operational are connected with heavy blue lines.
Want even more data!?
Your Castle provides us with a daily “Hotsheet”. This is a spreedsheet that pulls all homes for sale in the Denver metro area and then runs it against specific formulas to computate data you can use to find and buy the best value homes. The spreadsheet will show you at a glance if its been remolded, in foreclosure, if it needs repairs or if the seller is motivated to sell. The report also runs each home through a comparable analysis and will show you the high and low comparable pricing, the % that the subject property is below market value and by home much! In addition we show you which schools are near the subject property and how well they performs. The data is unbelievable and an extremely powerful tool when searching for homes.
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Ready to get started or have more questions about our price change maps?
Give me a call today so we can sit down and talk about it. Joe @ 720-663-7326