What You Need to Know About Buying an Investment Property in Denver
What type of project are you ready to undertake?
There are many different types of investment properties in Denver. From duplexes to condos to single-family houses, there are a wide variety of property options in neighborhoods across the city. Before you buy, or even start your search, it’s important to narrow down the type of property you are looking for. This will mean doing a lot of research about the type of project you are ready to undertake as well.
No. 1: The Fix and Flip
A fix and flip refers to when the property is gutted, remodeled and modernized with new interior design elements. This type of investment will most require new furnishings, fixtures, appliances and exterior landscaping. In most cases, this is going to take a substantial amount of money and time before you sell the property.
These properties can be very risky unless you have experience with these types of projects. One reason is that if you didn't pay for the house in cash, you have to cover the mortgage until the renovations are complete.
Watching HGTV makes it seem like this process is as simple as buying the fixer-upper, knocking down a few walls and selling the gorgeous home for a profit. But don't forget: those people are professionals (and they’re on television).
No. 2: Selling As-Is
The second option is simply buying, deep cleaning the property and selling it “as-is.” This is a less-risky option, but it also comes with less-rewards.
One benefit to this option is that you limit your financial exposure, because the property should sell quickly. To help ease the process, find a real estate professional that has experience with finding listings perfect for this type of investment.
No. 3: Buying a Rental
The third option is to buy a property that you can hold onto and rent out.
For example, you could buy a duplex, four-plex or multiplex property and rent out the different units. They can be a great investment and there are plenty of these properties in Denver.
You can also buy a house or an apartment with the plan to hold onto it as a rental property. Becoming a landlord can be one of the best financial decisions you can make because of the high returns you will see on your investment. Just remember that you’re either going to have to manage the property yourself, or pay a company to manage it for a fee.
Regardless of which option is best for you, there are a ton of reasons to utilize real estate as an investment vehicle. Start by finding a qualified agent who can help you find the perfect investment property.
Josh Steck is a Denver native, realtor and owner of Steck Real Estate. He specializes in helping people meet their financial goals through the purchase of rental properties. He has been specializing in the Denver rental market for over a decade.