With Denver seeing nearly 13,000 new apartment units come online in 2017, the competition has noticeably effected the rental market. Chances are, if you were trying to rent a 2 bedroom condo in the past couple months, demand hasn’t been quite what you were used to the past couple years. New luxury apartments like Country Club Towers in Cherry Creek, Cadence at Union Station and The Confluence Denver have been sucking up your rental pool.
Furthermore, even sleek amenities and free high-speed internet have not been able to absorb Denver’s growing population. Many of these apartment are offering incentives like first-month-rent-free and $300 Southwest Airline Coupons. What is the individual investor to do?
Don’t press the panic button just yet. Though we have seen a large influx of new units coming online (and they do have very impressive amenities), we view this as simply a glitch of timing. The problem right now is that so many of these buildings justopened their doors and the market is taking a while to absorb them. As those buildings fill in the next couple months, we should see a return to more of an owner’s market.
Look to March/April for the market to correct itself. If you currently have tenants, see if they are willing to go month-to-month until the spring or offer to extend their lease another year for a good price. However, it is important to adjust your expectations for 2018, the days of white-hot rental market is behind us with a return to more normalcy and competition ahead.