On their website, The Colorado Division of Housing provides wonderful surveys of vacancy rates for the single-family rental market. Anyone who’s been in this segment of the rental industry knows that coming up with meaningful vacancy data can be quite a challenge and honestly the Colorado DOH is the best resource I’ve found and their reports can be found on this page.
Last year, I started really digging into the data in the reports when we started hearing feedback from clients that they simply didn’t have as many vacant homes as they had in the past. And sure enough, in the 3rd quarter of 2007 the vacancy rate had fallen to an all-time low of 3.9% according to the Division of Housing.
2007 – Quarter 3:
Vacancy Rate: 3.9%
Median Rent: $900
Days on Market 42.2
This morning, I went to see if the 4th Quarter report was available yet (the reports aren’t always readily available) and found that they’ve provided the survey responses in searchable data for Q4. So, using one of the Metro-Average searches, I was able to obtain this data:
2007 – Quarter 4:
Vacancy Rate:3.3%
Median Rent: $925
Days on Market 58.8
So, the 4th quarter of 2007 marked another record low for the single-family vacancy rate in the Denver area. It’s interesting to see that the days on market actually went up, which I would guess is the result of the more desirable & affordable rentals becoming depleted and tougher to rent properties staying on the market longer. It might even be the result of over-priced shadow-market units as owners of those homes still hold out hope for selling or are unwilling to rent their home for less than the monthly mortgage. Those are just guesses though.
Nonetheless, the vacancy rate in Denver is at a record low and the median rent is increasing which should give investors strong incentive to consider Denver. One further way to research Denver as an investment opportunity is to visit the Denver section of Rentals.com and search for properties by zip-code. This will give you an understanding of the “comps” in an area and help you evaluate what a potential investment home will rent for.
