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Updated 4 months ago, 09/02/2024

User Stats

13
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Austin Wolff
  • Rental Property Investor
  • Los Angeles, CA
13
Votes |
13
Posts

I ranked Denver's best zip codes for investing -- locals, I'd love your thoughts

Austin Wolff
  • Rental Property Investor
  • Los Angeles, CA
Posted

I’m a Data Scientist living in Los Angeles, and must invest out-of-state. Denver is an attractive metro for a few reasons, so I downloaded monthly price and rent growth at the zip code level from Zillow’s public housing data.

I then used a ranking algorithm to sort the top 10 zip codes for investing based on monthly average price growth and monthly average rent growth (both by percent growth), from 2019-2024.

If you know the Denver area well, I’d love your opinion on the results -- I certainly need it. Data science is no good without review by a subject matter expert, such as a local like yourself!

Below is the result of mapping all zip codes, and coloring them by the average monthly price growth (%). You may see some zip codes missing -- this is because Zillow didn’t have data on them in their public dataset I used.

If you’d like to enlarge the image, you can open it in a new tab.

Now let’s only look at only the top 10 ranked zip codes. They are ranked (using the price-and-rent-growth weighting algorithm) as follows:

  1. 80003
  2. 80401
  3. 80219
  4. 80017
  5. 80010
  6. 80212
  7. 80239
  8. 80104
  9. 80249
  10. 80226

Let’s see the average monthly price growth map again with just the top 10 zip codes:

Now let’s look at the average monthly rent growth for the top 10 ranked zip codes.

And now let’s look at the rent-price ratios for the top 10 zip codes:

Now let’s take a look at the prices for each of these zip codes:

So far, 80003 and 80219 look like the best zip codes for buy-and-hold strategies close to the front range (if we ignore Aurora, CO completely).

What are your thoughts? Do you disagree? Do these maps fit your understanding of the neighborhoods? I would love to hear your feedback!

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2,638
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5,774
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Scott Trench
Pro Member
  • President of BiggerPockets
  • Denver, CO
5,774
Votes |
2,638
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Scott Trench
Pro Member
  • President of BiggerPockets
  • Denver, CO
Replied

Thanks for the informative post! 

A couple of points for your consideration: 

- Are the markets with the most rent growth and price growth the exact opposite, in some cases, of the best markets to invest in now? They were good, but will they be going forward? 

- Are the markets likely to experience the most rent and price growth going forward likely to be: 

    - Markets with the lowest supply coming online

    - Markets with the best schools

    - Markets with the lowest crime

Anyways - food for thought! Also, be careful if you proceed with future analyses like this. Many people have gotten themselves into a tremendous trouble for publicly posting about "good" and "bad" neighborhoods. Whether intent is there or not, you will be accused of redlining if you spin "red yellow green" or similar color coded market maps to identify places to invest or move.  

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26
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Replied

I'm in 80005 which is Arvada (near Standley Lake). There is a ton of new construction going around in the Candelas area and a huge boom is expected in rentals, including the monthly rent. We are currently paying $2,800 per month for a 3 bed, 3 bath home, which is a steal of a deal from our standpoint since most other homes in the area are going for $3,500 per month plus. I can give you much more information if you'd like in the whole area in general if you'd like. I'd also look into some places a little further north, such as Longmont and Loveland.

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7,162
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4,415
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Replied

The AI using NLP model can query the web and fetch lot of unstructured data and yielding the result, I was like surprised. Here's the answer :

here is a summary of the rent growth trends for zip codes within Denver, CO, sorted from highest to lowest where data is available:

  1. 80216 (Globeville, Elyria-Swansea) - Rents increased 8% year-over-year, the biggest jump in the Denver top 10 most expensive zip codes as of 2019. Average rent was $1,981. 1
  2. 80205 (Cole, Whittier neighborhoods) - Rents increased 38.50% from 2011 to 2020, going from 13,499 renters in 2011 to 18,691 renters in 2020. 2
  3. 80247 (Windsor neighborhood) - Rents increased 31.80% from 2011 to 2020, going from 15,551 renters in 2011 to 20,493 renters in 2020. 2
  4. 80222 (Denver, Cherry Hills Village) - Rents increased 47% from 2011 to 2020, going from 8,446 renters in 2011 to 12,416 renters in 2020. 2
  5. 80202 (Downtown, Union Station area) - Rents increased 81.30% from 2011 to 2020, the fastest growing among the zip codes mentioned, going from 6,185 renters in 2011 to 11,214 renters in 2020. 2
  6. 80206 (Cherry Creek, Cheesman Park, Congress Park) - Rents increased 1.4% year-over-year as of 2019, with average rent of $2,454, the most expensive in Denver. 1

For the Denver metro area overall, rents increased 0.2% from January to February 2024, a similar growth rate compared to the same period in 2023. Year-over-year, rents are down 1% as of March 2024. 4The data shows significant variation in rent growth across different Denver neighborhoods in recent years. Downtown adjacent areas like Globeville/Elyria-Swansea and Cole/Whittier saw some of the highest rent increases. Established high-end neighborhoods like Cherry Creek saw more modest rent growth.

User Stats

533
Posts
263
Votes
Dan Guenther
Agent
  • Real Estate Agent
  • Longmont, CO
263
Votes |
533
Posts
Dan Guenther
Agent
  • Real Estate Agent
  • Longmont, CO
Replied

Hey @Austin Wolff - this is great! I'm an investor agent based out of Longmont and work from the Greater Denver Metro and up to Longmont (Northern Colorado). I'd be happy to walk through your analysis a bit more and provide some on the ground insight on your findings. Let me know! 

User Stats

13
Posts
13
Votes
Austin Wolff
  • Rental Property Investor
  • Los Angeles, CA
13
Votes |
13
Posts
Austin Wolff
  • Rental Property Investor
  • Los Angeles, CA
Replied
Quote from @Scott Trench:

Thanks for the informative post! 

A couple of points for your consideration: 

- Are the markets with the most rent growth and price growth the exact opposite, in some cases, of the best markets to invest in now? They were good, but will they be going forward? 

- Are the markets likely to experience the most rent and price growth going forward likely to be: 

    - Markets with the lowest supply coming online

    - Markets with the best schools

    - Markets with the lowest crime

Anyways - food for thought! Also, be careful if you proceed with future analyses like this. Many people have gotten themselves into a tremendous trouble for publicly posting about "good" and "bad" neighborhoods. Whether intent is there or not, you will be accused of redlining if you spin "red yellow green" or similar color coded market maps to identify places to invest or move.  


Great notes, I will keep all of this in mind! And yes, I absolutely should account for housing supply, school ratings and crime ratings. Thank you!

User Stats

1
Posts
0
Votes
Douglas M Genzer
Pro Member
0
Votes |
1
Posts
Douglas M Genzer
Pro Member
Replied

I have a small 3bd 2 bath rental in 80003 and I've been able to increase rent every time someone moves out. Just went up $400 a month after a two year tenant to $2600 in April.

  • Douglas M Genzer