Real Estate Investing in Northern Colorado: Is It Still Worth It?
Updated: 15 hours ago
Where We've Been
To everything, there is a season. So say The Byrds, so says King Solomon, and so goes the moon, the sun, and even The Bachelor.
Asset classes operate in their own ecosystems within the larger economic landscape. About 15 years ago, podcasts, blogs, and websites began to cover every topic under the sun. What once required formal education or a library card is now accessible for free to anyone with an internet connection.
New Investors Enter the Field
The rise of new real estate investors took time. The pain of the Great Recession was still fresh. Eventually, the market recovered, and amateur investors began to make moves. They were fueled by genuinely helpful knowledge from sources like BiggerPockets and plenty of hype from gurus who emerge whenever fresh blood is detected.
Charts from John Burns Research and Consulting illustrate trends in real estate investing over the last couple of decades. Recently, the low-interest rate environment during the COVID era drove significant investment activity. Home prices soared until mortgage rates rose sharply in 2022. The frenzy calmed, leaving us with record-high home prices and interest rates we hadn't seen since 2008.
Does Real Estate Investing Still Make Sense?
Many of us entered real estate investing when things were much more accessible. Prices were lower, and interest rates were more favorable. Today, the question is, "Does real estate investing still make sense?"
Yes, It Does!
Here's why: Real estate remains the most powerful vehicle for ordinary people to build wealth.
As with any investment, the devil is in the details. Here are a few strategies and perspectives that remain effective.
Real Estate Investing Principles and Strategies That Always Work
Leverage: This is when you use a loan to purchase an asset. Real estate is unique in this regard. While there are more sophisticated ways to buy assets, leverage in real estate is a key concept underlying nearly every purchase.
House Hacking: This involves using the home you live in to generate income. Many people start this way. It can be as simple as renting to roommates or buying a 4-unit property where you live in one unit and rent the others.
Short-term Rentals (STR): These are properties rented out for 30 days or fewer. Some say STRs are "dead," but they still work well in the right markets. While they require more capital and active management, they can yield high returns if managed properly.
Medium-term Rentals (MTR): These rentals fall between short and long-term options. MTRs are rarely regulated like STRs and can serve as a temporary or long-term solution for maximizing returns.
Long-term Rentals (LTR): This traditional model involves renting out unfurnished properties with long-term leases. While the numbers may look different now, the fundamentals remain the same. You may need to put down 40-50%, but borrowing 50-60% of the cash required can still create great opportunities.
The Long Game: Playing the long game in real estate is a solid strategy. Patience rewards investors with wealth growth through appreciation and debt pay down. Quick profits are possible but often more challenging and riskier.
Partnership: With real estate becoming less affordable, pooling resources with other investors can create opportunities. This approach can be beneficial when others are sitting on the sidelines.
These strategies are just a starting point for anyone considering real estate investing in today's market.
The Northern Colorado Advantage
If you're in Northern Colorado, the long-term prospects remain strong. The Crisafulli Team is still investing here, putting our money where our mouths are.
If you're wondering where to start, reach out today.
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