Real estate investing, when done appropriately, can create long term wealth and financial security. Too many folks jump into the real estate investing world, spurred on by a new book promising riches, or an info-mercial that touts low risk but in reality there are risks. Trust me, it's not as easy as those salesmen make it seem, but it doesn't have to be risky...
In Fort Collins, there are several factors that make real estate investing an excellent vehicle towards long term wealth while with low risk.
1) High, Sustainable Rents
According to the Northern Colorado Business Report, Fort Collins/Loveland has the highest rental rates in the state. The average rental in Fort Collins goes for $996 per month, which is higher than rates in the Denver metro area. Taking advantage of high rents will improve cash flow.
2) Built in Equity
Fort Collins has a reasonable amount of bank owned foreclosures, short sales and other distressed properties that have the opportunity to provide built in equity upon rehabilitation. Finding the diamonds in the rough can prove difficult, but the hunt is well worth it. If you're able to get a distressed property for 15% below market value, and put 5% in repairs, you've already got 10% of the homes value in built in equity. Rent it out for several years and reap the rewards of your efforts.
3) Safe, Diversified Economy
Fort Collins is home to one of the safest, most diverse and resilient economies in the nation. According the the Fort Collins Chamber of Commerce, Fort Collins is strong in high tech, manufacturing, higher education, and government employment. It's easy to see why we have such a diverse economy, our major employers include Anheuser Busch, Hewlett Packard, Colorado State University, Woodward, and many more. The mix of both blue collar, white collar and green collar jobs keep the city safe from typical boom and bust cycles.
4) Renewable Rental Base
Colorado State University is a major driver for the rental base in Fort Collins. Having thousands of students pour out of the dorms and into rental housing each year keeps turnover consistent and renewable. Enrollment is either consistent or growing at CSU and demand for rental homes is abundant. On top of the student rental base, those renting in the senior age bracket have been growing too.
5) Low Vacancy Rate
At last report, Fort Collins rental vacancy rates have fallen to the lowest levels in a generation. Only 3% of rentals are recorded as "vacant". That means if you buy an investment property, and price rents appropriately, you have a 97% chance of filling your vacancy. I like those odds. Low vacancies are advantageous for real estate investors not only to fill your vacancy, but also to have a larger pool of qualified tenants. With a tight rental market, you get to pick from the cream of the crop, meaning on-time rent payments, less damage to your unit, longer lease rates, and higher rents! What could be better?
I'd like to help you get into the world of real estate investing. Give me a call or email me and see what kind of opportunities are available for your particular situation. Together, we can work to get you down the road towards financial security.
Jared Reimer is a real estate broker with Prudential Rocky Mountain Realtors in Northern Colorado. Real estate is his passion and he always wants to connect with like-minded and savvy real estate fans. For more information or to get in touch with Jared, please visit his website at www.ReimerRE.com or email him at JaredReimer@ReimerRE.com