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Rents keep rising
Colorado Springs rents are on the rise
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The Apartment Association of Southern Colorado put out a quarterly document about Apartment rents and vacancies on a quarterly basis. It’s a great document, any for anyone interest in buying Investment Properties in Colorado Springs, it’s well worth reading. Here’s some of the highlights of the report:
- Median rent was $ 740.15 for the second quarter of 2011 compared to $714.14 for the first quarter of 2011.
- The Colorado Springs vacancy rate is the lowest in the Southwest and the highest in the Security/Widefield/Fountain area.
- The highest average rent is in the Northwest and the lowest average rent is in Security/Widefield Fountain Area.
- The average rent for an efficiency apartment is $568 vs. the average rent for a two bedroom/two bath apartment is $945.38
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To find out more information about buying a home or an investment property in Colorado Springs area, call ….
Kathy (719-287-1049) KTorline@msn.com
Location, Location, Location for Real Estate Investment Property
How important is the location for Real Estate Investment Property in Colorado Springs?
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I work with a variety of real estate investors in Colorado Springs; and I often get asked the question on how important location is when buying investment property. There
is no easy answer to this question, as it depends on the goals of the investor. Some investors are purely looking at the return on their money, some are looking at future appreciation of the property; some are looking at properties that are close to where they live; some want a historic property, some want properties close to the military bases or close to one of the colleges.
In Colorado Springs (like most cities), pricing for residential and income producing properties can vary vastly depending on the part of town. A Fourplex in Fountain close to Fort Carson, may sell for around $150000 to 200,000 and each 2 bedroom 1 bath unit may rent for $550.00 each. The monthly income if it’s fully rented would be $2200.00 a month.
The same style of fourplex in the Northwest part of town may rent for closer to $650,00 a month and may sell for closer to $250,000 to $275,000. The monthly income if it’s fully rented would be $2600.00 a month.
A Historic property in downtown Colorado Springs with 4 units could sell for anywhere between $200,000 to $400,000; all depending on the size of the units and the total square footage of the property. Rents will vary vastly depending on the size of the units.
Some investors say it’s all about the location. I say it’s all about the return on capital AND the location.
Give me a call if you would like to receive a list of duplex, triplex and fourplex units available in Colorado Springs
Kathy Torline 719-287-1049
How do I analyze Colorado Springs Investment Property?
How do I analyze a Colorado Springs investment property?
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The Colorado Springs Real Estate Market is seeing more and more investors enter the market. Every investor has their own reason for purchasing rental properties, some are looking to 
generate income, some are looking to build wealth, and some are looking for long term appreciation. Regardless of the reason, it’s important to understand how to analyze the purchase and there are many different ways to compare properties, including comparing the Gross Rent Multiplier, Cash Flow Analysis, and Cash on Cash. We’re going to focus on Cash Flow analysis.
Let’s first start with some basics…………. what is Net Operating Income and Cash Flow
It’s one of the most important numbers in investment analysis, and it’s used by appraisers to determine value, as well as it’s used by lenders to help determine the amount they will lend on a property An easy definition is that Net Operating Income is the amount of money available to pay the mortgage; and determine whether a property has a negative or positive cash flow.
Here’s a quick example of Cash Flow for a Read the rest of this entry »
Analyzing real estate investments
Don’t forget about Carrying costs
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Colorado Springs Real Estate Investors who are buying properties to fix and flip need to do their homework when analyzing the 
costs of properties. Some investors forget about the carrying costs of the transaction, they just look at just the purchase price and resale price. They deduct the cost to fix it, but they overlook other expenses.
Ax an example, if an investor bought a home for $100000, put $25,000 into it, and sold it for $150000, it seems like they are making a profit of $25,000. But what about the carrying costs? The costs to purchase the property? The cost to sell a property?
Here’s a list of some of the costs that investors forget about
- Closing costs to purchase the property including title insurance, property tax allocation, HOA reserves, water bills, survey, inspection costs, etc.
- Mortgage Interest payments
- Real estate property taxes
- Hazard insurance
- HOA’s
- Utilities
- Miscellaneous supplies
- Real Estate broker commission when the investor sales it
- Closing costs when selling the property, including Buyer’s closing costs (it’s typical in today’s market for the buyer’s to ask for a portion or all of their closing costs to be paid by the seller)
- Additional costs incurred during the Buyer’s inspection
- Resale closing costs
My suggestions is to make up an Excel worksheet to include all of the potential expenses. Then fill in the blanks including 6 months of carrying costs. Subtract these costs as well as your fix up costs from the initial purchase price. Does the purchase still make sense? Is it still a good deal.
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To find out more information about buying a home or an investment property in Colorado Springs area, call ….
Kathy (719-287-1049) KTorline@msn.com
Waiver on flipping is good for the local Colorado Springs economy
Waiver announced on 90 day flipping
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- Pre-Qualification or Pre-Approval, which do you need to buy a home?
- How do I get a down payment for Homes in Colorado Springs?
- Credit score explanation
The 90 Day Flipping rule has been lifted for at least 1 year starting February 1, 2010. HOWEVER, it’s important to keep in mind that it is 
not completely free from all stipulations. Here’s a link to the actual Waiver on the HUD web site; which gives the conditions of the waiver.
What does this mean to the Colorado Springs First Time Home buyers?
It means that buyers who are going to buy a property with a FHA loan financing can do so without having to wait for 90-days from the date of the last purchase of that property in order to purchase it.
As an example: A home was purchased by an Investor on November 15, 2009 and the investor fixed up the property. With the previous 90-day rule, a buyer who was using FHA financing would have to wait 90-days from the 11/15/09 date in order to go into contract on this property. The new rule is waiving the 90 day period.
What does this mean to Colorado Springs Real Estate Investors?
It means that investors can buy and flip properties and not worry about waiting 90 days to get the property sold. Although conventional and cash purchases were not affected by the 90-day rule, the majority of homes are now being financed by FHA. This moratorium will help homes sell quicker; which means investors can then move on to the next property!
Who Else Does it Affect?
Many of the homes that the banks are foreclosing on are in bad shape and need repaired and updated to make them more attractive to Colorado Springs First Time Home Buyers.
I think this change in the guidelines will help Colorado Springs foreclosed homes sell faster, which in turn helps the local economy. It’s estimated that on an average a home buyer spends an additional $8000.00 on a house after they purchase it, which certainly also stimulates the economy.
Wouldn’t you much rather have a homeowner in your neighborhood vs. a foreclosed empty house?
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Kathy (719-287-1049) KTorline@msn.com
