2% Deals In Denver Metro Area

[Colin Carr]

Are people getting 2% deals in the Denver area? I've been looking and I'm seeing what appears to be less than 1% in many places. Now to be fair, this was a pretty broad brush and I didn't get to analyzing too many properties. But I thought I would throw the question out to the community to see what people come back with. Thanks!

[Jean Bolger]

Ditto the above. 1% is good in Denver right now. But don't despair. A lot of the areas where you can (or could) get 2% are much lower priced markets, meaning that the rents are much lower too.  Look at it this way: say you had two identical properties, one in Cheapville and one in Denver. Cheapville rents for $1000, Denver rents for $2000. Your operating expenses (other than debt service) on the two properties is not going to be that different. Perhaps not exactly the same in real life since labor and material costs differ, but a furnace in Denver is not going to cost twice as much as a furnace in Cheapville. And Colorado has mercifully low property tax rates compared to many of the areas where you could find a property to meet the 2% rule.