The Colorado real estate market is finally starting to cool off. Rising interest rates are making affordability a challenge for some homebuyers.
After a temporary dip, home prices are on the rise again. The median sales price in Colorado was $575,000 in May 2023. This was the highest monthly sales price observed since July 2022.
While sales prices are still high, rent is also increasing rapidly. In Colorado's metropolitan areas, it is common for rent to exceed $3,700 per month.
Many investors are wondering whether selling or renting is the best option for them. Read on to learn how homes for rent are faring in this market. Explore topics such as rental property management and whether a house rental works for you.
Selling Vs Renting Out Your House
There are pros and cons to both selling and renting. Each homeowner needs to carefully evaluate their situation and make the best decision for them.
For example, you can use our rent vs sell calculator to help make your decision. Continue reading to learn the advantages and disadvantages of both approaches:
Selling
The primary benefit of selling your home is the cash windfall that you will receive. After you pay off any existing mortgage balances, you will receive a check for the remainder of the home's sale price.
Time is another benefit of selling. It will likely take a few months to sell your home from listing to closing. After closing, you walk away with your profits and are done with it.
There are a few disadvantages to selling. For starters, you may pass up the opportunity to earn a steady passive income on your property.
You may also sell the house for less than you anticipated. This is increasingly possible as experts predict a nationwide recession and a decline in home prices.
Lastly, sometimes major issues are discovered during the home inspection process. You may have to invest considerable money in repairs to get your sale to the finish line.
Renting
Colorado is one of the best states for rental property owners. Since 2020, average rental prices in Colorado's metropolitan areas have increased by more than $1,300 per month. This increase was 4.5x greater than the state ranked number two.
Rental property owners receive a steady passive income. As home values increase, rent also rises, meaning that there is room for growth.
Some property owners do not want to become a landlord because of the monthly administrative and maintenance work. However, the good news is that you can hire a rental property management company to ease the burden.
With a property manager, you can simply collect monthly profit. They will deal with your tenants and respond quickly to any home repairs or maintenance needs.
Your Guide to Homes for Rent or Sale
Property owners should carefully consider their options before selling or renting. However, it is important to recognize how lucrative renting is in the Colorado market.
Rent prices have been steadily rising for years with no signs of slowing. A steady flow of rental income is certain to improve your quality of life.
If you are wondering how to handle homes for rent, contact us today to speak with a professional.
