So you bought an investment property, now what?

Investing in a home is a great way to build passive income but earning from your investment will take a little groundwork to become a well-oiled machine. This is your beginner’s guide to owning an investment property so you can set up that foundation properly to avoid future headaches.

Make sure it’s livable

It’s important to start with your home inspection before you start making plans. Use the inspection report to prioritize the maintenance issues.

Before a tenant moves in, make sure the home is livable. Handle the important items that affect the livability of the property, either now or in the near future. If the inspector noticed a leak in the roof or holes that could lead to infestation, take care of those first. Other maintenance issues to prioritize are the fuel and the hot water source.

If your city has inspection and registration requirements, be sure to cross check those inspection checklists with your current property. If the property wouldn’t pass now, make sure it will pass by the time the city sees it.

Upgrade the space

Once your property is in livable condition, it’s time to upgrade. If you have any left-over budget after the necessities are handled, consider adding a bedroom or a bathroom where you can find the space. These rooms heavily impact the rental price, and the more you have the higher the price. If there’s no space for another bed or bath, think about finishing the basement or upgrading some of the appliances to make the property more attractive to potential tenants.

Use similar properties in your neighborhood as your inspiration. These units are your competition, think about what you can add, or even take away, that would help you compete. Ask yourself what about your home is unique and in what ways does that affect your rentability? If every unit in your area has hardwoods, how can you make your carpeted home appealing? Maybe new carpet? Or is switching to hardwoods, or vinyl laminate that looks like wood, worth it?

Market it to future tenants

You need two things in your listing: 1) Great Photos 2) An Amazing Description

After you’ve perfected the property, it’s time to tell potential tenants that it’s available. Creating the listing is essential in drawing eyes on the unit so you can show it to as many people as possible.

Renters looking to move are quick to make their first impression of a property with thumbnail photos on a map. So, take lots of great, bright, photos of the entire place to showcase the amenities and show potential tenants what it looks like, then choose the best photo to be the first in the lineup. Remember to get the lighting is just right to show every corner of the listing. Dark photos scare tenants away, making them think the unit is dingy and dirty. Light and bright photos show a clean home that’s move-in ready. They can imagine themselves living there a lot easier than in dark and cramped looking units.

Next, they’ll read the description. This is again where other listings in your area can help you.

Read other listings to structure your description and to draw inspiration on what tenants might think is important. Find the selling points and emphasize those above the unique features, especially if those unique features are obvious in the photos.

 

Posted on December 25, 2019 at 10:44 pm
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No two alike

Anyone who has more than one child is frequently amazed by the difference between the children. How is it that two kids from the same parents are so different from each other?

Same goes in our Northern Colorado market. We see a major difference between certain price ranges and certain locations right here in our little neck of the woods.

Clients are constantly reading about and hearing about the “hot” market. They make assumptions that every price range and every location in Larimer and Weld Counties are on fire. Not true!

Just like two kids from the same parents are different, two price ranges in the same place are very different.

To make this point, let’s look at months of inventory. This statistic simply measures how long it would take to sell the current inventory of homes at the current pace of sales.

Across all price ranges, months of inventory in Larimer County = 2.0. Meaning it would take two months to sell all the homes currently for sale. But this is misleading, because months of inventory…

So, the $1,000,000 seller who hears that the market is “hot” is actually faced with a year’s inventory currently on the market!

This is a very high-level look at the differences in our market. I am happy to give you a detailed look at your exact neighborhood in your exact price range. Let us know if we can help!

Posted on August 18, 2017 at 8:06 pm
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Gardner Report – Market Analysis

You can download the 4-page PDF here: Gardner Report PDF Download

The Gardner Report  | Metro Denver and Northern Colorado Q2 2017

The following analysis of the Metro Denver and Northern Colorado real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact me.

ECONOMIC OVERVIEW


Colorado added 62,000 new jobs over the past 12 months, an increase of 2.4% over this time last year. All of the metropolitan markets included in this report saw annual employment growth, with substantial growth in Boulder (4.7%) and Fort Collins (+4.1%), and more modest growth in Grand Junction (0.3%).

In May, the unemployment rate in the state was 2.3%, matching the prior month and down 3.4% from a year ago. The lowest unemployment rate was in Fort Collins at just 2.0%. The highest rate was in Grand Junction, though it was still a relatively low 3.3%. It is reasonable to expect these markets will see above-average wage growth given the tight labor market.

HOME SALES ACTIVITY


  • There were 17,581 home sales during the first quarter of 2017, a solid annual increase of 3.9% over the first quarter of 2016.
  • Jefferson County saw sales grow at the fastest rate over the past 12 months, with a 9.4% increase. There was also an impressive increase in Douglas County (+6.3%).  More modest sales growth was seen in Denver and Weld Counties.
  • Even with the rise in sales, listing activity is still running at well below historic averages, with the total number of homes for sale in the second quarter 7.6% below a year ago.
  • Sales growth continues to trend higher, but inventory levels remain well below where they need to be to satisfy demand.
Annual Change in Home Sales

HOME PRICES


  • Due to solid demand, home prices continue to rise with average prices up by 8.5% year-over-year to an average across the region of $438,980.
  • Boulder County saw slower appreciation in home values, but the trend is still positive.
  • Appreciation was strongest in Denver and Weld Counties, where prices rose by 12.4% and 10.6% respectively.
  • Economic growth is driving job growth, which is driving housing demand. Given the relative shortage of homes for sale, expect to see home prices continue to appreciate at above-average rates at least through the rest of the year.
Metro Denver and Northern Colorado Heat Map
Annual Change in Home Sale Prices

DAYS ON MARKET


  • The average number of days it took to sell a home dropped by three days when compared to the second quarter of 2016.
  • Homes in all counties contained in this report took less than a month to sell. Adams County stood out as it took an average of only 11 days to sell a home.
  • During the second quarter, it took an average of just 17 days to sell a home. This is down by a substantial 13 days compared to the first quarter of this year.
  • The takeaway here is that demand remains robust as evidenced by the remarkably short amount of time that it is taking to sell a home.
Average Days on Market

CONCLUSIONS


This speedometer reflects the state of the region’s housing market using housing inventory, price gains, home sales, interest rates, and larger economic factors.After the second quarter of 2017, I have moved the needle even farther in favor of sellers. Mortgage rates remain very competitive and, with the specter of lending standards easing a little, demand will remain robust, which will be reflected in rising home values.

ABOUT MATTHEW GARDNER


Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has more than 30 years of professional experience both in the U.S. and U.K.
Posted on August 13, 2017 at 6:17 pm
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Signs of Slowing?

An article in last week’s Denver Post about the Metro Denver market cooling off has prompted questions from our clients.

Is the same thing happening in Northern Colorado?

Are the Larimer and Weld County markets showing signs of slowing?

Here’s the deal…

The Denver Post article points to the difference in number of transactions between June and July of this year. It’s no surprise to us that July had fewer closings.

What’s true in Metro Denver is also true in Northern Colorado – June tends to have more closings than any other month during the year so of course July will be slower.

What we do notice when we look at the numbers is that the difference between June and July is significant.

In all major markets in Northern Colorado, the difference between June and July is the greatest it has ever been in the last four years.

For example, in Fort Collins, July had 18% fewer closings than June. Whereas last year the difference was 9%. In Greeley the difference this year was 16% while last year was only 5%.

A month over month difference does not necessarily indicate a long-term trend. However, there is a difference compared to last year which should be welcome news to buyers who have been waiting for a slow down.

We have just completed a comprehensive report for anyone thinking about selling their home.

The Insider’s Guide to Selling Your Home (without any stress or surprises) is now available for you.

It is hot off the press and you can request a copy by emailing rdupont@windermere.com

Contact me to get your copy immediately so you can see everything you need to know to sell your home in today’s market.

Posted on August 13, 2017 at 5:56 pm
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The Wellington Explosion

What if we told you there is a real estate market that has seen a 300% increase in sales volume in only 5 years?

What if we told you that market was right in our back yard?

The market is Wellington and what is happening there is extraordinary.

Because price increases in Fort Collins have eliminated virtually all options for the sub $300,000 buyer, Wellington has become a very popular place to buy a home.

In June of 2012, the average price there was $185,000. Today it is $300,500!

In 2012 there were 222 residential sales in Wellington. This year is on pace to ecliplse 500.

Yes, Wellington has exploded and we don’t see it slowing down any time soon!

Fun facts about Wellington:

The Town of Wellington was an oil, coal and agricultural hub throughout the 1800s and became a stopping location for wagon trains, travelers, and military movement between Cheyenne, Wyoming and Fort Collins, Colorado. The town was founded in 1902, incorporated in 1905 and named after C.L. Wellington, an employee of the Colorado and Southern Railroad. 

Around the same time the population began to grow in Wellington, woolly mammoth remains were discovered by a construction crew while digging foundations for new homes. The remains were carefully excavated by a University of Colorado team while residents watched with excitement. Unfortunately, after being taken back to the University for further examination, the tusks were dropped and shattered on a floor. In recognition and remembrance of this event, the subdivision where they were found named a street Mammoth Circle.

Wellington maintained a population around 500 throughout the 20th century and grew to about 1,000 until the early 2000s. Today, Wellington is home to a population of nearly 8,300 residents.

Fun Facts & Image Source: www.townofwellington.com

Posted on July 7, 2017 at 3:47 pm
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A History Lesson

The national homeownership rate is a very interesting statistic to track. It is simply the percentage of households in the country which are owned by the occupant (versus rented).

Did you know that during the 30 years between 1965 and 1995 the homeownership rate stayed between 63% and 66%? 

Then everything changed as government policies were put in place to encourage a higher percentage of homeowners. During the housing bubble the rate approached 70%.

As the bubble burst, this percentage fell rapidly and eventually bottomed out at 62.9%. Today it sits at 63.7% which is right inside the range of where it was between 1965 and 1995. As we see it, it’s right where it needs to be.

The fact that the homeownership rate sits at “normal” levels is one of three reasons we don’t see a national housing bubble today.

The President of Windermere Colorado, Eric Thompson, created a short video for you which shows you all three reasons. To watch the video, CLICK HERE.

Posted on April 21, 2017 at 10:09 pm
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Now What?

The Federal Reserve raised their benchmark interest rate 0.25% this week.

So what does this mean for real estate?

Some perspective is in order…

First, mortgage rates are not directly tied to the Fed Funds rate. They are, however, closely tied to the 10-year Treasury.

While the Fed was raising their rates this week, mortgage rates actually dipped lower (although slightly).

Mortgage rates today on a 30-year loan are essentially 4.25%.

The long term average for mortage rates, going all the way back to 1970 is 7.5%

For every 1% rise in rates, there is a corresponding 10% impact to the monthly payment.

Mortgage rates have increased about 0.75% since the election.

Most economists expect rates to increase another 0.5% by year-end.

I am watching mortgage rates closely and will continue to keep my customers updated as to where the experts think they are heading.

Posted on March 17, 2017 at 5:43 pm
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The Results Are In!

You’ve probably heard that prices are up in Northern Colorado

Another source just confirmed this.

The Federal Housing Finance Authority recently released their quarterly report on 260 metropolitan markets across the country.

Get this, Colorado has 4 cities ranked in the top 15 for yearly price growth. 

Northern Colorado is well-represented on this list.

  • 11th Fort Collins/Loveland
  • 12th Greeley
  • 15th Boulder

By the way, Denver is 14th. And in case you are wondering, Palm Bay Florida is ranked 1st.

All of the Northern Colorado cities have had just over 10% appreciation in the last year meaning that prices are growing at about double the long-term average.

To receive a copy of the full FHFA report, simply email me at rdupont@windermere.com and I will get one in your hands right away.

Posted on March 14, 2017 at 7:27 pm
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The Estes Park Mountain Market

With fall right around the corner many of us will be trekking up to Estes Park to see the Aspen leaves turning.

As you drive through Estes you may wonder "how's the mountain market?"

Here are some fun facts about real estate in Estes Park.mountain-1244132_1920

  • The average price today is $394,046 – not that different than Fort Collins.
  • Average prices have gone up $60,000 in the last three years.
  • Their market has about 300 sales per year- roughly a tenth of the amount in Fort Collins.
  • If you were looking for a home in Estes between $300,000 and $500,000, you would have 15 to choose from.

Now you know about the Mountain Market!

Posted on August 15, 2016 at 6:53 pm
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Door Opens for Buyers

After a very active (to say the least) spring and summer, the door has now opened for buyers in our market.

Sell Your Home With EaseBuyers who were frustrated during the first half of the year with low inventory and bidding wars now realize a better environment. It's time to step off the sidelines and take a fresh look at what the market has to offer.

The first piece of good news is that rates have dropped to near all-time lows. Rates today are 0.6% lower than they were on January 1st. What this means on a $400,000 home with a conventional loan is a monthly savings of $110!

The second piece of good news is that inventory levels are coming up. There are more homes on the market to pick from and lower demand because of seasonal slowing. Months of inventory in Larimer County markets have bounced up 20% to 33%.

Posted on August 8, 2016 at 4:45 pm
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