BY KAREN LIBIN
We are fortunate to live in one of the strongest housing markets in the US. For years we have seen consistent and strong gains in housing values. But what you may not realize is we live in one of the best rental markets as well: There’s high demand, thus high rents. And there looks to be no end in sight: With very little room to build, we have a limited supply of rental housing with a continuous new stream of people wanting to live here. Many Boulder County folks understand this and have a good chunk of their capital in local property. In fact, some locals don’t even put their capital in the investment markets; they just invest in Boulder property.
Here are a few reasons why you might want to consider purchasing a local rental:
Historically, Boulder County properties have increased in value at a higher rate than the investment markets. For instance, over the last several years a good investment account usually earns in the single digits while Boulder County housing values have increased in the double digits. All this happens while your rental’s income pays down the mortgage. After years, your rental property is worth much more, and you owe much less on it. There are also tax deduction benefits.
A rental provides light at the end of the tunnel for you come retirement. You may not know what the investment markets will do – especially now! You can’t be sure of social security. But you can be sure Boulder’s mountains will be here and people will always want to live by them!
Project or not
If you like to be hands-on and want a project, you can manage a rental property yourself. It’s a great way to keep active during retirement. But if not, a management company will do so at a small fee while you still maintain a positive cash flow.
Can utilize IRA funds
Many folks do not realize that they can use funds from a self-managed IRA without penalty towards a rental down payment. This is a relatively new option where you can borrow up to 65 percent of the home’s appraised value for a loan. If this is something you may be interested in, I would be happy to explain it to you in detail.
As a realtor with a finance background, I’m passionate about rental investments and what they can provide for my clients. It’s always rewarding to me to help people find a solid rental investment and assist them with the financing and management options.