Denver #1 in Rent prices and it's not slowing down. Invest now!

[Jerry Vohrer]

I am a big fan of Denver as a whole for investing, living, etc. There is one neighborhood that I think has the potential to be a goldmine though.

Elyria/Swansea is just north of downtown and other hot areas. 

Pros:  Closeness to Downtown - Very low prices - The CHANGES (see links below)

Cons: overhead highway (being relocated) - Still run down in areas (but see the changes that are in store)

Denver is taking this run down area and sinking tons of money into it to turn it into the entryway to downtown from the airport. They are.

Moving the elevated highway underground and building a beautiful city park over it. Based on this park in Dallas http://www.klydewarrenpark.org

Turning industrial into residential and commercial. Look what this has done in Denver's RINO neighborhood just south of here, Brooklyn NY, etc. 

And a lot more. Check out Denver's plan, so you don't have to take my word for it. www.denverleadership.org/wp-content/uploads/2015/10/Kelly-Leids-slides.pdf

I recently bought a single family 6bed/3bath house 3000+ SF built in 1999 with a brand new roof and flooring for $275k. You can't buy a condo for that anymore. 

What do you think?

[Bill S.]

@Jerry Vohrer here are my thoughts. I'm not a big fan of the area. It will probably do alright but I think it's hard for the small investor to make a play in the area. The neighborhood is full of small homes on small lots that are zoned single family or larger industrial tracts. There are some areas zoned duplexes. The rest is zoned industrial. What is going to happen with that? Who knows. Will Denver rezone/downzone it? The stated objective is to convert the industrial to commercial in this area. What happens with that is anyone's guess at this point unless you are on the inner circle of development politics. The large tracts of industrial land will likely go to apartment buildings if the current development trends hold. We all know that sort of thing is bit fickle. The Gates Rubber campus was slated for a huge condo complex about 10 years ago. It's just now getting some traction (less than 50% complete) with apartment buildings being constructed. I think the original planners figured the area would have been built out about 5 years ago.

My biggest concern is time frame. Right now construction is scheduled to begin late 2017. I could find no construction time tables. Following TREX as an example, it was scheduled for 7 years but finished 22 months ahead of schedule. This project will likely take 4-6 years to complete. That puts the window of completion at 6-8 years from now. Given that, I think you are getting in a bit early. The biggest bang for the buck comes when you buy the year or two before the project is complete from a SFR perspective. Homes along the Santa Fe light rail jumped 25% in the first year after that line opened.

The other play is to purchase large lots that are zoned for high density and wait until it's complete. That is pretty speculative. Again, the best is get in just before the project is done and the general population starts buying. The saying in Commercial development is that "commercial follows roof tops". Meaning, commercial developers only step in after there is demand due to residential development. You could argue that there is some demand for commercial from the downtown core but it's still a bit of a hike to that area.

It think you will do ok but I think there are areas that offer a quicker return and by rinsing and repeating you will be miles ahead rather than waiting for the project to be completed around you.